Online Poker Legislation Making Progress in the Netherlands
The Netherlands may be known for its liberal stance on soft drugs and prostitution, but it’s a whole different story when it comes to gambling and poker.
There are no legal online poker sites, while state-owned Holland Casino is the only bricks-and-mortar operator available for card players to sharpen their skills in a live environment.
However, legal and regulated online gambling is slowly coming to fruition in the country, although we’re still probably 18 months away from licensed operators opening their virtual doors to customers.
iGaming legislation called the Dutch Remote Gambling Act was drawn up last year, and the Council of Ministers gave a remote gaming bill the green light this February.
After technical advice from the Council of State, the bill is expected to be sent for adoption in the Lower House of Parliament, and then to the House of the Senate for the rubber stamp this summer.
From there, the bill should be published in the Official Gazette early next year. The country’s gaming authority, Kansspelautoriteit, will probably dish out remote gaming licenses to operators in Q2 or Q3 of 2015.
According to H2 Gambling Capital, the Netherlands is the seventh largest EU gambling market in terms of gross win, and H2 predicts the regulated online environment will generate €200 million in gross gaming revenue (GGR) in its first full year.
GamblingData predicts €266.5 million, rising to €370 million in 2016. Sports betting is expected to become the main gambling product. The Netherlands may only boast a modest population of 16.7 million, but around 95% of households have internet access, which still makes this an attractive proposition for domestic brands and European gaming heavyweights.
Willem van Oort, CEO of iGaming consultants GranViaOnline and organizer of the annual Gaming in Holland conference, told PokerNews: "It seems the process will be transparent and well defined, therefore the acceptation rate should be near 100%. The international operators are well positioned to take the lead, with Unibet, bwin.party, Bet365, Betfair and PokerStars the most obvious candidates."
There’s not expected to be a cap on the number of iGaming licenses available, while Dutch online poker players will have access to international liquidity.
Justin Franssen, partner at Kalff Katz & Franssen Attorneys at Law, told PokerNews that it is unclear at this stage as to the level of competitiveness and likely winners in the Netherlands. "The success and competitiveness of the upcoming regulated remote gaming market all depends on the conditions set in the primary and secondary legislation, the latter will be published for consultation before the summer," he said. "A draft version of the remote gaming bill was published for consultation in the summer of 2013, and it is currently unclear what changes have been made since then by the Ministry of Security & Justice. These changes will become clear when the bill is sent to the Lower House of Parliament."
Those awarded licenses look set to face a tax rate 20%, which is more favorable than the 29% imposed on the land-based operators Holland Casino and arcades.
The Dutch government feels that a higher rate would deter operators from the market and tempt players to continue to use unlicensed gambling sites that promise a higher payout. However, the tax burden for online firms is set to be higher than the headline 20% rate, says Franssen.
"Apart from the conditions which future licensees have to comply with, various costs have been included in the draft remote gaming bill which, in addition to a 20% GGR tax rate, will likely amount to an effective cost burden of 26 to 27% GGR."
Either way, van Oort feels the government’s cut is too high. "It's not the right number. Only around 70% of the present dot-com market would be taken into a regulated environment with that tax rate, leaving 30% to the non-regulated markets, which is too high. Ten or 15% would be more adequate."
Plans to establish a legal and regulated Dutch online gambling environment have rumbled on for five years now, although the finish line is now in sight.
Potential delays and bumps in the road ahead are a possibility, of course, but the Council Ministers’ approval of a remote gaming bill is a significant step in the Netherlands joining the growing band of regulated online gaming markets in Europe.
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