Netherlands online gambling market will open starting with October 1st, 2021. After years of delays, the Dutch Senate approved the Remote Gambling Act in February of 2019.
The land-based gambling market is very well regulated in the Netherlands, and it consists of Holland Casino monopoly operating 14 casinos, state lottery, charity lotteries, a monopoly on lotto and sports betting, a monopoly on horse racing, and private operators of 42.000 slot machines in arcades, bars, and restaurants.
Online games of chance are currently prohibited in the Netherlands. The current legal regime has no provision for granting a license for offering online gambling. But all this is about to change, as the country is all set to implement the Koa Act replacing the current Games of Chances Act, a legal framework that dates back to 1964.
René Jansen, Chairman of the Kansspelautoriteit (KSA), declared that “Ultimately, our work revolves around the interests of the player, of the consumer. A fair market remains an important objective but is above all a means to allow consumers to play safely.”
The online gambling licensing application process began on April 1st, 2021, and the market will open six months later.
Online Gambling Market Size
The Netherlands has a population of 17.15 million people, and 99.2% are using a high mobile connection rate. 96% of the population are internet users, 95.7% own a smartphone, 84.5% own a laptop or desktop computer, and 55.5% own a tablet device.
The average time spent using the internet on all device categories amounts to 5 hours 28 minutes.
Despite the fact that online gambling is more accessible than land-based games of chance, the size of the online gambling market remains considerably smaller than the land-based market.
In a report published by the KSA, the Gross Gaming Revenue generated by the Dutch online gambling market reached €424 million in 2019. In the same report, the land-based sector registered a GGR of €2.7 billion.
As the KOA Act enters into force, the total size of the online market is expected to reach €513 million euros in 2021 and get to a whopping €1.27 billion euros by 2025.
Netherlands Online Gambling License
The market only opens for the following types of licenses:
- Casino games in which the players play against the operator;
- Casino games in which the players play against each other;
- Bets on events during a sports match or on the outcome of sports matches;
- Bets on the results of horse races and harness racing organized by or under the auspices of the Dutch Draff
The Dutch regulator, Netherlands Gambling Authority is responsible for the licensing process and for the market supervision.
The licensing process opened on April 1st, 2021, therefore from the date of drafting this article, the applications are just being accepted.
In order to obtain a gambling license, applicants should follow some requirements:
- have their registered office in the EU or the European Economic Area;
- the CDB data repository must be located in the Netherlands and physically separated from the operators gambling system; “The legislation requires that the CDB final data repository must be located in Netherlands physically separated from the operators’ gambling system. Both may be located in the same data centre if an operator chooses to do so, however, data stored in this main the CDB final data repository must be logistically and safely separated from any other data.”
- continuity of the license must be reasonably guaranteed;
- provide a report to confirm that applicant is not bankrupted, payments or assets are not subject to an enforceable attachment.
There is no limitation on the number of accepted licenses, therefore anyone who fulfills all requirements of the regulator is entitled to receive a license. The duration of the license is 5 (five) years, and the licensing fee is set at EUR 48,000.
Do Not Operate Without A License
All online gambling applications shall also be assessed against the criteria as per the policy rules which include operating without a permit. No applicants shall operate on the Dutch market in two years and nine months preceding the date on which the application was submitted and during the processing of the application.
An operation is deemed illegal when the following criteria are met:
- The game offer took place on a website whose extension ended in .nl;
- The game offer was wholly or partly in the Dutch language;
- The relevant offer or its provider advertised on TV, radio, or printed media aimed at the Dutch market;
- For the games on offer, there was a use of domain name containing terms typical of the Netherlands in combination with the designation of games of chance;
- The website(s) on which the games of chance were offered contained any features from which a focus on the Netherlands can be deduced;
- For the games of chance offered, it was possible to use means of payment that are exclusively or largely used by Dutch people;
Online Gambling Taxation
Currently, the tax is 30.1%, and the taxes are calculated from the gross gaming revenue (GGR) of the operators.
The taxation rate was increased from 29% to 30.1% from January 1, 2018, due to loss of income for the state caused by delays in the adoption of the Online Gambling Act. According to a press release from the regulator, the gambling tax will be released back to 29% six months after the entry into force of the Online Gambling Act.
Expectations from this market are rather high. The Netherlands took its time – and at a cost of multiple delays, hopefully, they’ve prepared their regulation for the high demands of the gambling industry.
The Gambling Commission said: “We welcome this response to the DCMS consultation, as it provides much-needed changes to tax revenues that will allow us to continue to regulate effectively.”
Now is the time to secure a significant chunk of the available market.
Szilaghi Consulting offers consultancy services and complete package solutions for gambling license acquisition that include:
- Gambling jurisdiction and business advisory
- Gambling business corporate structure incorporation
- Opening bank accounts
- Gambling license application
