On 11 November, the Gaming Authority (“Ksa”) published further information for applying for licenses for online games of chance. On the basis of this information, providers can already prepare for 1 July 2020. This is the date on which applications can be submitted to the Ksa. The online gambling market will then open on 1 January 2021. The Ksa still has a lot of work to do. Both the content of the lower regulations and the mentioned dates may still change.
Applications must be submitted digitally and in the Dutch language. English is also permitted only in explicitly stated exceptional cases. The costs for an application amount to EUR 45,000. Attention! If the application is rejected, the applicant will lose this amount. Good preparation is therefore essential.
Providers can make good use of the preparation time. A large number of requirements are imposed on potential licensees. In addition, all conditions that must be met must be substantiated with documentary evidence. Some documentary evidence will have to be verified by an independent third party. The Ksa will announce at a later date what evidence this concerns and which independent third party can be called in.
A license can be applied for for 4 types of online games of chance:
- Casino games where the players play against the licensee
- Casino games in which the players play against each other
- Betting on events during a sporting event or on the outcome of a sporting event
- Betting on results of horse races and hard races.
The following subjects will be dealt with when assessing an application for a licence. There are a significant number of subjects which, as indicated, must be supported by documentary evidence.
Strict reliability requirements are attached to the licence for the provision of online games of chance. This means, among other things, that all natural and legal persons directly and indirectly involved must be identified. In this context, a network overview issued by an independent third party (such as a lawyer) must be provided. Also, the antecedents of the (legal) persons directly and indirectly involved must be provided up to eight years ago. In a policy rule, the Ksa has previously determined that applicants who offered online games of chance illegally two years prior to submitting the application, which were also aimed at the Netherlands, are “not out of doubt” as to their reliability.
The applicant must have a policy plan on how to ensure that employees have and maintain appropriate knowledge in the field of games of chance.
The continuity of the applicant must be in order. The applicant must not be bankrupt or have applied for a moratorium. Furthermore, it is not allowed that a substantial part of the assets have been seized.
In this context, the applicant must also demonstrate that appropriate measures have been taken to ensure that the player’s assets are segregated from working capital. This can be done, for example, by means of a quality account or a bank guarantee.
In addition, an exit plan must be drawn up in which guarantees are given regarding the repayment of player assets.
4. Addiction prevention
The applicant must have a representative in the Netherlands in the field of addiction prevention. He must also have an addiction prevention and training policy that has been drawn up in collaboration with experts and is in line with the Dutch addiction care system.
5. Advertising & Marketing
The applicant must have an advertising and marketing policy which, among other things, must indicate how to prevent advertising from being misleading and aggressive, incite excessive participation, and target vulnerable groups. The use of possible marketing bonuses must also be described.
6. Consumer protection
There are legal provisions concerning the establishment of a customer service and complaints procedure. The applicant must demonstrate how these legal provisions have been implemented.
The applicant must demonstrate how matchfixing risks are managed and which systems and processes he has set up to detect and report any matchfixing. Nina Lodder has published an informative article in Dutch on the subject of matchfixing (available here).
8. Money laundering
The applicant must comply with the Money Laundering and Terrorist Financing (Prevention) Act (Wwft). The Wwft has its own control system regarding risk management, client investigations, reporting unusual transactions, retention of supporting documents and training. The Ksa has drawn up a set of guidelines for the Wwft that will be amended for online providers at a later date.
9. Sanctions Act
The applicant must comply with the Sanctions Act. This concerns international measures as a result of violating or defrauding international peace or security.
In principle, applicants are allowed to outsource all work, unless the law opposes this (as in the case of the directorship). There must always be a policy plan describing the risks of outsourcing and a compliance officer must be appointed to supervise the outsourced work. Agreements with third party suppliers must be submitted to the Ksa.
The applicant must have drawn up an integrity policy aimed, among other things, at recognising and preventing fraud. There must be an up-to-date and systematic inventory, analysis and evaluation of integrity risks.
12. Payment transactions
The applicant must show a procedure description on how the primary payment process runs, how it is reported, how risk management is carried out, how incidents are dealt with and how an incident is prevented from occurring again.
13. Identification & verification
The applicant must have an identification procedure in place that allows it to verify the identity of players. Identification must come from an independent and reliable source. Documents that can serve as verification of identity are a valid passport, ID card or driving licence.
There will be a Central Register for the Exclusion of Games of Chance (CRUKs) in which problem players will be included. The applicant must demonstrate that he is able to check whether a player who wants to make use of his online gambling offer, is listed in this register. If a player is registered in the CRUKs, he/she must be disqualified. The connection procedure and technical conditions for the CRUKs will be announced at a later date. There will also be a trial period for market players.
15. Control database
The applicant must have a control database. The Ksa can use this to view and test the digital data of the applicant. Specifications for this control database will be published at a later date.
The procedure for applying for a licence for online games of chance is solid. A considerable number of subjects will be included in the assessment and the applicant will have to provide a large number of supporting documents. All the more reason for applicants to start collecting the correct supporting documents and drawing up the required documents in good time.
If you would like support in applying for a licence or would like more information about online gambling, please contact Thomas van Essen or Nina Lodder.