Court ruling throws Dutch lottery monopoly into question

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As reported by Casino Nieuws, the businesses applied for instant lottery, sports betting and lottery licences, which were rejected by the KSA on 4 September 2022. The businesses were not named in the official ruling, but Dutch newspaper Brabants Dagblad has named them as Jack’s Casino and, which are owned by JVH Gaming.

In its response, KSA argued the licence had been granted to a third party – Nederlandse Loterij – and could only be issued to one legal entity, as per the monopoly policy.

KSA referred to the Netherlands’ gambling policy “horizontally consistent” in its response. The claimants countered by arguing this hadn’t been the case since the Remote Gambling Act (KOA) was introduced in October 2021.

They also pointed to rulings issued 2 May 2018 and 10 March 2021. The 2018 ruling preserved the monopoly status quo on sports competitions and instant lotteries while the second, ahead of the Dutch igaming market opening, ruled it was permissible to maintain the lottery’s monopoly while granting permit to charitable lotteries.

Dutch gambling policy ‘no longer consistent’

Assessing the claimants’ argument, the court agreed that the Netherlands’ Remote Gambling Act (KOA) – on which KSA based its refusals – did not comply with Article 56 of the Treaty on the Functioning of the European Union (TFEU).

Article 56 of the TFEU bans restrictions on offering services within EU member states.

The court ultimately determined that Dutch gambling policy is “no longer horizontally consistent” in the “current state of affairs”.

“[The] court notes the current gambling policy, after the entry into force of the KOA Act, has a single licence system for land-based games of chance with a smaller risk of addiction and a smaller chance of criminal activities,” read the ruling.

“While the current system for online gambling with a greater risk of addiction and a greater chance of criminal activities has an open licensing system.

“In the court’s opinion, this inconsistency, viewed in the light of the legal developments in connection with the entry into force of the KOA Act and in the light of the actual effects of that entry into force, makes Dutch gambling policy no longer horizontally consistent.”

The court accepted the claim a monopoly licensing system is not necessary to protect the “public interests” involved in gambling, such as customer protection, or to operate land-based gaming.

Ruling throws up questions

The court concluded that stopping operators from offering services unless it’s within a monopoly system “is not proportionate, because it does not guarantee the general objectives in a systematic and coherent manner”.

The KSA was therefore not within its rights to deny the licence applications on the basis Nederlandse Loterij was already approved to operate lotteries in the market, the court ruled.

The regulator now has 12 weeks to reassess the two applications. The court is aware of the potential impact, noting “this ruling has major consequences for the licensing for organising the three country-based games of chance”.

KSA must also pay €1,750 in court costs towards the two claimants, plus their €365 court fee.

The Dutch Lottery holds – for now – all three available monopoly licences across its three segments – Krasloten, Toto and Lotto.

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