Thank you Willem, for allowing me to speak here today. You might have expected the presence of our chairman Michel Groothuizen here today but it is me, as head of the regulatory department, who has the honour of sharing with you today my views on the gambling market. First of all, I will be addressing the renewed vision on the gambling market by the State Secretary, and it’s possible consequences. I will also inform you of the changes the Ksa is going through, and how protecting consumers is becoming increasingly important. And of course, I will not miss out on the opportunity of issuing some warnings.
The fact that it’s me addressing you perhaps also says something about the changes the Ksa has gone through recently. e are increasingly engaging with the market and the traditional distance between operator and regulator seems to be narrowing. Of course, we are still pursuing our own independent course, but your valuable insights certainly help us strengthen our regulation even further.
Last year, René Jansen stood where I'm standing now, and in my preparations for this speech, I stumbled across his closing words. Since I don't expect you to know all our speeches by heart, I will repeat them briefly. 'The sentiment in our society regarding gambling depends on the choices you make as an industry. So please, do the right thing and put those safeguards against problem gambling in place so that I can hand over the baton to my successor Michel Groothuizen with a clear conscience, knowing that he will be speaking to a room full of licensed operators once again next year.' I'm not Michel, but I am facing a large group of licensed operators. That part worked out well. But the first part of his statement resonated with me: the sentiment about the market depends in part on the choices you make. And we've seen that again in the past year...
High risk product
State Secretary Struycken presented a renewed vision of the gambling market last year. This view is in line with the changing view on gambling that we are also increasingly seeing in society. Where at first we looked at gambling as a game with possible negative consequences, we are more and more considering it a high risk product. The ministry even called it’s new vision a "fundamental change of direction". The main premise here is to protect all citizens from the risks of the negative effects of gambling, such as addiction or debt. This includes an extra focus on minors and young adults. This change of direction is partly driven by the idea that current policies do not currently protect people adequately. This simply means one thing: laws and regulations will become stricter and operators' room for manoeuvre will be further restricted. There is talk of raising the minimum age to 21 for high-risk gambling, and overarching deposit limits. Advertising for high-risk gambling may also be further restricted.
Of course, when all these intentions were announced, you made sure your opinions were clearly heard. We legalised the online gambling market in the Netherlands because politicians believed people will gamble anyway, in which case it's better if they can do so safely. If you look at the size of the illegal market, including for 2021, I'm quite willing to go along with that. So the initial priority was to establish an attractive legal market, where it would be worthwhile for operators to invest money in gaining a market share. Operating legally has to be profitable. But politicians are increasingly backtracking on that premise, partly because of what we are seeing in your organisations.
Open mind
When I started as head of regulation just over six months ago, a new world opened up for me. After almost 20 years at the ACM, regulation is in my blood, but I still didn't know all that much about the gambling market. That has changed since! I wanted to approach operators with an open mind and I believe that not all our communications need be doom and gloom. If we see operators developing good initiatives, I will be the first to mention these in our reporting as well. But sometimes even I can't make things appear better than they are. This year, we went public with our first duty-of-care fine. We fined one operator €734,000 because young adults were able to gamble away tens of thousands of euros without adequate intervention. That total lack of consideration for vulnerable players was at odds with the original approach of legalisation and for that reason the reins are now being tightened.
The same goes for advertising: I still see far too often that advertising rules are not properly followed. The subsequent outrage over this makes a total ban on advertising an increasingly realistic option. Which is still undesirable as far as the Ksa is concerned!
But: I have already indicated that not everything is doom and gloom. Our new online duty-of-care department has asked you how you conduct financial capacity tests under the new policy rule. This showed that there are operators who go beyond the rules to protect players. They either do not allow young adults to increase the deposit limit or calculate at a lower percentage if a player’s monthly income is low. Taking that kind of extra measure is often far from advantageous for business operations and thus takes guts, which I welcome.
Cooperative attitude
What I'm also very appreciative of is your cooperative attitude. We've been experimenting with round tables over the past year, where we have open conversations about different measures and their implementation. Those conversations were of great value to us. We understand that imposed measures sometimes require adaptability and that post-implementation there are obstacles or ambiguities that we could not have anticipated beforehand. Being able to have an open conversation about that helps us further strengthen our regulation. We also have more frequent direct contact with operators in that context. When we come across things we have questions about or are dissatisfied with, we engage immediately. I see that these talks have a lot of effect; infringements are quickly stopped and communicating openly about them sets an example for other operators as well.
Open and flexible
That improved contact with the industry is part of the Ksa's further professionalisation into what we sometimes call a "regulator 2.0" We want to get rid of the image of the unreachable, rigid regulator exclusively focused on infringements and fines, and move more and more towards an open and flexible organisation that finds creative solutions to difficult problems. The conversations we have with you are part of that, as is the recently started communicating by name. The parties that may have received less desirable attention in that context have all been very cooperative and see the added value of the process. For example, a warning to one party now sets an example for the rest.
In light of our and the ministry's new priorities, the Ksa is also taking on a greater role in consumer protection. An internal programme to prevent gambling-related harm has been set up, which includes growing and further professionalizing Loket Kansspel and setting up awareness campaigns on the dangers of gambling. We continuously draw attention to the so-called Gokstop with targeted campaigns, in order to raise awareness of the Cruks Register. And in the reorganisation later this year, we will turn this gambling-related harm programme into its own, independent department, so that we can make even greater strides in player protection.
Innovative, creative projects
In other areas, we also complement our traditional regulatory tasks with innovative, creative projects. One example is tackling the illegal market. We see how the industry is joining hands to battle illegal operators. For example with initiatives by affiliates to push out illegal ads that specifically target vulnerable groups and to direct people to pages with information on addiction help. It is important to cooperate to battle the illegal market: the channelization rate based on gross gambling revenue is worryingly low at 50%. For every euro spent at legal operators, one euro disappears into the pocket of illegal parties at the same time. Fortunately, player-based channelization is as high as ever at 92%, but we remain keen on developments in that area.
High priority
Tackling the illegal market is therefore an undiminished high priority in our regulation. We are increasing our capacity with a new project, where we are frustrating the infrastructure around illegal operators. We do this by delving deeper into the techniques used by illegal parties and then using them ourselves in creative ways. Whereas we previously focused on imposing fines and getting websites offline, we are now also looking more at websites promoting illegal offerings and ads for these types of parties on social media and in apps. We also cut off access to illegal gambling where possible by working more closely with service providers, for example. Because illegal gambling also simply starts with being able to deposit money. Thus, together, we are making unlicensed offers to Dutch players as unattractive as possible. On top of that, we are working together with the ministry to increase our possibilities to become even more effective.
Regulator 2.0
Finally, our evolution towards regulator 2.0 will hopefully also lead to a lot of licence holders 2.0 in the next licensing round in 2026 and beyond. Our colleagues are already talking to industry associations and others about the potential challenges you may face in these licence applications. I want to stress that this is a process we want to work through with you, to make it as smooth as possible on both sides. At the same time, I would also like to impress on you that those who were previously deemed suitable to offer are not automatically accepted as such in the next round. When assessing applications, we take previous history into account: good and bad. The Ksa has stated more than once recently that some behaviours are unacceptable and could affect licence renewal. These are not empty words on our part.
In conclusion, I realise that this renewed vision of the gambling market does not always make it easy for operators. You have made your opinions clearly heard about the measures announced and the rise of the illegal market. The Ksa is not blind to that. With the significant steps we are now taking as an organisation, we are making every effort to better protect consumers. We will do that by looking with you at enhancing the duty of care, by making consumers aware of the dangers of gambling and better informing problem players, and by cracking down harder on the illegal market. By focusing on those three pillars, we are working towards a stable, safe gambling market that is worthwhile for operators but that focuses above all on the safety of Dutch players. Or, to quote last year's speech again: hopefully Michel will be here next year in front of a room full of licence holders. Rest assured of our commitment to this providing that, at the same time, we can trust you to put your best foot forward. Protecting players was the reason for building a licensed gambling market, so keep prioritising that very thing.