KSA marks five years of Dutch online gambling market

The Dutch online gambling market was legalised five years ago this month, with the first licence holders starting operations, the Kansspelautoriteit (KSA) said. The regulator said research repeatedly indicates that about 90% of Dutch online gamblers use only licensed providers, but that the picture differs in money terms: for every euro staked with a legal operator, one euro goes to the illegal circuit. The KSA said enforcement in that circuit is its top priority.

The KSA said its experience of fining illegal providers shows that fines send a clear signal about what is and is not permitted, but have little effect when it comes to collection. Over the past year and a half the regulator has therefore followed a parallel track: making illegal supply harder to find and preventing payments to and through it, rather than fining alone. The KSA said that work is not finished but the direction is clear.

At a committee debate in September, VVD member of parliament Bart Bikkers argued for a firm approach and said the KSA should fine the large technology companies, or Very Large Online Platforms (VLOPs) in European terminology, which he said are largely responsible for the visibility of illegal supply. Gambling lawyer Justin Franssen also said recently from Lisbon that the KSA should act more strictly against Big Tech, according to the regulator's account.

KSA chair Michel Groothuizen wrote that fining technology companies that facilitate illegal gambling is more difficult and a matter of much longer duration. He said Big Tech earns substantial revenue from advertisements for illegal gambling providers in the Netherlands, in Europe and worldwide, and that giving that up voluntarily would run against their business model. The KSA said it can gather sufficiently convincing evidence that these companies facilitate prohibited activities in the Netherlands and elsewhere in Europe, citing advertisements aimed at vulnerable people entered in exclusion registers in various European countries and advertisements aimed at children under 18, which it said are easy to find and number in the thousands or hundreds of thousands.

Groothuizen said both Dutch law and the European Digital Services Act provide grounds to penalise such conduct, though under the DSA it is for the European Commission to decide and the KSA can only supply it with such grounds. He said having a case does not mean proceedings must be brought now, that a lost procedure is worse than one not started, and that a fine is a means rather than an end for him. He said a national or European procedure would mean confronting an opponent with practically inexhaustible financial resources that, based on experience in other files, is prepared to fight to the highest court, so that a final judgment could take five years, with an uncertain outcome.

Against that background, the KSA said it is also trying to reach agreements with the VLOPs to improve their conduct voluntarily. It said some changes important to the regulator are simple for the companies while others require much of them technically or financially. The KSA said it and a number of European regulators spoke with Google and Meta in Dublin, where both have their European headquarters, in the spring, with both sides aware that litigation was the alternative to cooperation. A joint task force is now working, for example with Google, on a white list of all legal providers in the EU, so that all other operators would by definition be in breach and could be excluded by Google.

Groothuizen said the large technology companies are not permanent allies and that their interests often conflict with what the KSA wants. He said the legal route remains open if the VLOPs are found to make insufficient efforts or to be insufficiently effective despite voluntary efforts, and that persuading and fighting are not mutually exclusive and can happen at the same time. He said the KSA will not hesitate to take on one of them if agreements with Big Tech deliver too little.