19 May, 2021

Getting a Head Start

After years of seemingly endless delays, the regulated Dutch online gambling market is now scheduled to open in October. Willem van Oort, founder of Gaming in Holland, examines what this market will initially look like, and which parties are gaining a running start

The first version of the current iteration of the Dutch Remote Gaming Act was first proposed in 2014. Since then, we have become accustomed to a seemingly endless series of setbacks and delays. While we might thus be inclined to expect more of the same, we are now truly in the home stretch.

The Dutch Remote Gambling Act entered into force on 1 April. From that date, the Netherlands Gambling Authority also started processing remote license applications. At this point, there is no foreseeable circumstance that would preclude the Dutch regulated online market from opening, as scheduled, on 1 October, 2021. The die, as the poets say, has finally been cast.


No single “Big Bang”

Earlier this year, the Netherlands Gambling Authority (KSA) announced it expected to receive around 40 applications for online gaming licences after the entry into force of the Remote Gambling Act, and to approve around 35.

Several major international operators will not be immediately eligible to apply for a remote licence. Operators who are deemed to have actively targeted the Dutch market in the past – for instance, through Dutch-language websites or by offering the iDEAL payment method – must wait for a period of at least 32 months from the moment they started complying with the KSA's prioritisation criteria before they become eligible.

As the existence of this cooling-off period has been known for quite some time, the initial expectation was that there would be two waves of market entrants. First, an initial group of incumbents (land-based casinos and lotteries, for example) accompanied by a limited number of “clean” international operators. Subsequently, this first group would be followed by a gradual trickle of international operators emerging piecemeal from their individual cooling-off periods.

However, instead of two groups of licence applicants, we are now more likely to end up with something closer to three.


An intermediate deadline

Initially, the Dutch regulator announced that remote licence applications should include a full certification of operators’ game systems. However, the KSA published some of the required technical details so late as to make it virtually impossible for licence applicants to have their game systems fully audited by 1 April. In a gesture of goodwill, the regulator then decided to allow applicants to submit the certified audit report of their game system up to three months later, until 1 July 2021, but only if the initial licence application was submitted prior to 15 April 2021.This decision, together with limited capacity at testing labs, meant that those applicants who couldn't make the 15 April deadline would likely be faced with months of additional delays before they could even submit their licence applications.

This means, in effect, that there will be three groups of market entrants: those who applied before 15 April, those who apply after 15 April, and operators subject to the cooling-off period. As the processing of a licence application will take up to six months, only operators in the first group can expect to be fully licensed when the regulated market opens on 1 October.


The first group

On 19 April, the Netherlands Gambling Authority announced that it had received 28 remote licence applications. All applicants, moreover, paid the €48,000 ($57,000) processing fee. In other words, we are dealing with serious applications that are quite likely to be approved.

Based on the number of 28 initial licence applications, it’s reasonable to expect that around 25 licenced operators will be ready to enter the regulated Dutch online market on 1 October. Of course, it remains to be seen to what extent these leaders can translate their head start into long-term advantage.


The Belgians are coming

At this point, it’s not fully clear which operators belong to this first group. But anecdotal data suggests that it includes several Belgian operators looking to expand their online operations into the Netherlands. As the political lobbying prior to the introduction of the Remote Gambling Act was being completely dominated by Dutch land-based incumbents on one side, and major international online operators on the other, this interest of Belgian operators may come as a surprise to some. But having already had a first crack at online operations, combined with their experience in a somewhat similar market, could very well mean that these Belgian operators are well poised to take advantage of the Dutch opportunity.