Speech René Jansen, 3 februari 2023

As chair of the Netherlands Gambling Authority (Kansspelautoriteit, or Ksa), I'd like to talk to you today about the latter: about the regulation of online gambling in the Netherlands. With the market having been open for almost a year and a half now, I'd like to share some of our findings. Much is going well, but there's also ample room and need for improvement.

This is a sentiment widely shared by society at large, so I'd like to focus your attention this evening on some of the things that need to be improved. I’ll warn you: I’m going to be strict.

To begin with, we'll look at developments since the opening of the Dutch online gambling market. Alongside our experiences over the past year, I'll share some of the figures. Next, I'll take you through our experiences with the data vault, or ‘Control Database’ (CDB). Last but not least, I've got some news about enforcement actions to share with you.

So, let's start with developments in the online gambling market. The Netherlands has spent a long time staking out the new playing field with legal gambling operators. Just over a year ago, on 1 October 2021 to be precise, for the first time Dutch players could gamble online legally.

From this date, the market opened to online operators who had completed an extensive licensing procedure. As of now, there are 24 licensed operators with whom Dutch players can gamble online legally.

Another 17 licence applications are under assessment. To give you a fuller picture: in 2022, we received a total of 27 new applications.

Not all of those applicants actually followed through. Seven were withdrawn in 2022 when the Ksa announced its intention to reject their licence applications. The reasons for this were varied. Integrity was one. I'll go into that a little more later.

However, in the end it always came down to applicants being unable to meet all the stringent requirements.

Three applications were formally rejected. A common factor among both rejected and withdrawn applications was that applicants had been involved in offering illegal gambling to Dutch players in the past. The integrity test is therefore a key determinant for access to a just and fair gambling market.

Apart from issuing licenses, we also occasionally expand existing licences upon request. In 2022, two licensees asked the Ksa to amend their licences to expand their game offering. One application was approved, the other is still pending.

Besides assessing licence applications, we also reviewed the application process and procedures on our side. This led to an evaluation of our policy rules for licence applications.

In late December of 2022, a number of Ksa policy regulations were amended – or, more accurately, simplified. Mainly by limiting the amount of information applicants have to submit. For example, auditor’s reports are no longer required beforehand for some components and several of the mandatory forms have been pared down. All with the aim to make what is – with good reason – a quite complicated licensing procedure as efficient as possible.

So, with this snapshot of licence applications and issuances last year, you're up to speed on where things currently stand. From what I've told you so far, I think it's fair to say the market is still in flux.

Having outlined the licence application process, I’d like to move on now to an update about Ksa’s oversight of the gambling market last year. Last year was the first full year we supervised online operators, the licensees.

There are a number of aspects we are not entirely satisfied about. The opening of the market gave rise to a flood of advertising. This has not helped public trust in the market and new operators.

The political response came swiftly with rules for using role models as well as a forthcoming ban on untargeted ads for risky games of chance. I assume this ban will be implemented in a few months. Fedor Meerts of the Ministry of Justice and Security will no doubt tell us more about that later.

For 2023, the Ksa has identified a number of supervision priorities. One is combating illegal advertising activities targeting young adults. By which I mean the age group of 18- to 24-year-olds. The legislator has good reasons for enacting extra protections for vulnerable people, including this target group. But, if you ask me, licensees are still too often toeing the line of this law.

It was in response to such practices that the Kansspelautoriteit fined one operator, TOTO Online, last November. Another fine, for operator JOI Gaming, was published last week. In both instances, the sanction was for sending mailings partly targeting players between the ages of 18 and 24. Clearly this is not the intention, and it's not allowed.

Aside from this violation, we discovered operators were falling short in other areas as well. In February 2022, it turned out a substantial number of operators’ advertising policies were not, or not fully, compliant with the law.

There were also a number of prohibited advertising campaigns broadcasted during the FIFA World Cup late last year. We took immediate action in those cases. For example when using role models in advertisements.

Lastly, in December, we had to call down operators about loyalty programmes aimed at young adults, and warned several to stop offering cashback bonuses.

Ladies and gentlemen, all of these incidents concerned licensed operators. Frankly, they should know better.

We are also continuing to see excesses in the duty of care compliance. Operators are still not always or consistently acting to stop excessive gambling behaviour.

I’m not saying this applies to all operators, but any lapse is one too many. So this is something we'll continue to monitor closely. We won't hesitate to impose sanctions where appropriate, and we’ll be investigating the need to clarify or tighten our policy rules. Obviously, within the parameters laid out by the legislature.

This brings me to another issue about which I am deeply concerned: the data vault, better known as the Control Database, or CDB for short. As you are aware, all online gambling operators are required by law to set up and maintain a data vault and reporting system, and a properly functioning CDB is a prerequisite for obtaining a license.

Operators must store all their platform transaction data in that data vault, or database. They also have to supply all relevant data about those transactions to the Ksa in near real-time so the Ksa can perform its supervision based on this data. That is, for monitoring of a responsible, reliable and verifiable offering of online gambling. As of last January, the CDB contained 1.6 billion records.

Of course, licensees were granted some leniency in the start-up phase. Yet, even then, ladies and gentlemen, performance in some cases has been truly sub-par. We identified that some licensees are still failing to send complete and correct data to the CDB in near real-time, and in some instances not according to the technical requirements, despite this being a legal criterion for licensing.

Most are meeting their obligations just as they ought to, in near real-time and exactly as agreed. But others are not.

In the recent period we spent considerable time testing, discussing, criticising and thinking along with operators. Unfortunately with disappointing results. Consequently, we are inching ever closer to our measure of last resort: a final warning with a deadline until correct data delivery procedures are in place and in effect. If that does not give the desired result, this can lead to suspending or revoking the licence.

Ladies and gentlemen, I am only telling you like it is. The CDB is our top priority, and we expect operators to take Board-level responsibility. This is ‘Chefsache’, as our German neighbours call it. Not bump it over to IT staff and forget about it.

The same applies to new licence applications currently pending at the Ksa, where, too often, we’re seeing that applicants don't go into the process well prepared.

We know technology can pose challenges. It happens to us at the Ksa, too. But we also know it’s possible to win out over challenges. Most licensees do! Just now, I told you that the premature termination of licence applications has so far tended to hinge on integrity issues. I predict that a few applications under assessment right now will meet their Waterloo in the CDB data vault. Promising to do better in future won't cut it anymore. Operators have to deliver now. I cannot emphasise this strongly enough.

Supplying these data is neither voluntary nor optional. It is a conditional statutory instrument for our supervision.

It is essential to enable safe gambling. Players need to be assured games are safe and conditions should be verifiable. That's good for both players and operators.

This brings me to the end of my talk this evening. I've focused mainly on how online operators can and must do better. My purpose has been to explain the urgency and underline the need for dilligence and the prioritisation this deserves. However, I'd like to close with what I promised earlier: some enforcement news.

Our licensing system also requires us to swiftly crack down on illegal offering. Just recently, the Ksa imposed a fine of 900,000 euros on an online operator – Shark77 – active on the Dutch market without a licence. In late 2022, Ksa's Board imposed fines on another 6 illegal online operators for similar violations.

Added up, this amounts to more than 25 million euros in fines. This amount is larger than you may have expected. The cause is that these are the first penalties following our new policy rules adopted in September 2021.

Names and jersey numbers will follow but can't be shared yet. The legal proceedings are still ongoing, and operators have asked for publication of these sanctions to be suspended. While we’ll have to wait and see how it plays out, there are some details I can share.

Never before have fines this high been handed out to illegal online gambling operators in the Netherlands. The sanctions now imposed are penalties for offering games of chance online without a licence to Dutch customers .

This in itself is subject to heavy sanctions. Our decisions have repeatedly pointed to the unlawful gains for illegal operators.

A specific example is the expense of applying for, and maintaining a licence. As you know, we estimate that licensing costs amount to some 800 thousand euros annually and even twice of that amount – 1.6 million euros – in the first year.

In the cases of almost all of these 7 offenders we furthermore established aggravating circumstances justifying higher fines. I'll name a few. Pre-input ‘Dutch’ information such as ‘+31’ in the telephone number entry field. Autoplay or turbo play buttons. Unreasonable general terms and conditions, such as a minimum sum for prize entitlement or disbursement. No significant age verification. Prohibited payment methods, such as cryptocurrency or anonymous payments. We even came across unlawful use of the Ksa's word trademark and false suggestions that the operator was licensed.

The imposed sanctions were raised for each aggravating circumstance. You'll be able to read about this once the decisions are published. But, for that, we have to await the judge's verdict, this being a rule of law.

Gambling industry regulation is based on ‘rules of play’ laid down in laws and regulations. We demand operators to abide by these rules, and they in turn rely on us to take action against abuses and illegal operators. Which we do!

Thank you for listening, and I hope that I have made it clear to you that the Ksa takes its licensing responsibilities and supervision extremely seriously. I also hope that, directly or indirectly, you will contribute to our mission of ‘Gambling safely’. With that, I wish you an enlightening and enjoyable rest of the evening!

Thank you for your attention.