Netherlands: new gambling regulation has to be postponed

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Netherlands: new gambling regulation has to be postponed

The Dutch government has decided to postpone the new gambling regulation. The original plan was to start accepting license applications from January 2021. But the date has been postponed to March 2021. This means that there will be no online casinos with a Dutch license before September 2021. The Netherlands has been preparing to regulate online gambling for several years. But now there is another shift shortly before the planned opening of the market. The Dutch Justice Minister Sander Dekker has announced that, due to the current crisis situation, many gaming providers need more time than originally planned. Many companies in the gambling industry are currently busy processing the effects of the crisis. The additional effort required to comply with the gambling regulations in the Netherlands can currently only be made by a few providers.

Dutch gambling regulation is dragging on

That is why the pragmatic decision was made that the processing of license applications would not start until March 2021 and not as planned in January 2021. A period of six months is provided for examining license applications. This means that online casinos with a Dutch license will not be available until September 2021 at the earliest. The decision is not ideal for the gaming providers who would have no problems adhering to the originally planned process. But ultimately it is only a matter of two months, so that all future market participants should not have any lasting problems. Most of the companies that will apply for an online casino license in the Netherlands are also active in many other markets. Therefore, the moderate postponement of two months should not lead to major difficulties. The prerequisite for this, however, is that no additional extension is necessary. That is not entirely certain, because nobody knows exactly how the current crisis will develop in the next few months.

It can be assumed that gambling providers in particular, who operate a large part of their business on land, have pushed for the licensing process in the Netherlands to be postponed. The companies that exclusively operate online casinos have been able to overcome the crisis in the past few months without major upheavals. But for a company that runs a large casino, for example, the last few months have been associated with numerous challenges. The casinos in the Netherlands were also completely closed at times, so that no income could be generated. The crisis has not only created economic problems. Some companies also had to part with employees due to financial constraints. Many Dutch companies that also want to apply for a license for online gambling come from the land-based casino business. The situation is still difficult for these providers. From the point of view of the Dutch government, there are therefore good reasons to postpone gambling regulation. For the new regulation to be successful, it is important that an orderly market emerges from the start. But that is not possible if many companies would have to forego a license application in the first step. In addition, there would probably be an insubordinate advantage for providers who rely exclusively on online gambling. For the Dutch gambling fans, however, the situation is very unpleasant. In the Netherlands there is a special regulation according to which only companies that have not been active in the Dutch online gambling market for a given period of time can apply for a license. As a result, the online gambling offer in the Netherlands will now remain poor for longer than planned.

Dutch gambling regulation more difficult than expected

The current crisis is only extending the gaming regulation for online casinos in the Netherlands by two months. But the Netherlands has been discussing how the regulation can be implemented for about two years. Obviously it is not easy to regulate online gambling. Sweden had this experience before. When Sweden first allowed online gambling in 2019, there was a huge rush from gambling providers. It took almost a year for the Swedish Gambling Authority to get the situation under control. In the Netherlands, the situation has been closely monitored and therefore a little more time has probably been allocated to prepare the new gambling regulation. But in the end it will mean that the gambling authority has about half a year to process and decide on all license applications. It remains to be seen whether six months will really be enough for this difficult task. Much will depend on how precise and clear the license terms are. Sweden, for example, has shown that it took a long time to clarify which rules the providers actually have to adhere to. Much would be gained if the Dutch gambling authority can largely avoid such problems. But one reason for the postponement of the new regulation is that communication with companies interested in a Dutch gambling license has recently become more and more difficult. That’s not a good sign.

It will probably take a few months before the gambling companies in the Netherlands are back in normal waters. A postponement of two months might end up being too little. It cannot therefore be ruled out that there will be another shift. If the health crisis in the Netherlands and in Europe as a whole worsens again in winter, Dutch gambling regulation may not even come until 2022. At the moment this is pure speculation. But a lot of things have happened in the last few months that hardly anyone expected. So why shouldn’t the Dutch gambling regulation be postponed twice in a row? In any case, it is a good thing that the Dutch government does not try to implement gambling regulation at all costs during difficult times. The collateral damage that could result would be massive, especially for gambling fans. An important point in the new gambling regulation in the Netherlands will be a self-exclusion system. Every provider with a Dutch license must in future ensure that players who are on a self-exclusion list cannot open an account. However, some technical adjustments are necessary for this, which many providers are currently unable to cope with. If in doubt, it is better to wait a little longer and then start right away at a high level with the new gaming regulation.

Similar problems with German gambling regulation?

The reason for the postponement of the new gambling regulation in the Netherlands could also be relevant in Germany. There are currently no plans to postpone the gambling regulation, which will apply from mid-2021. However, a lot can still happen in Germany in the next few months. If the first casinos with a German license are to be available on the Internet from mid-2021, that means in concrete terms that the first license applications must be submitted at the beginning of the coming year. Unlike in the Netherlands, there is still no gambling authority that can process these license applications. Time is running out for German gambling regulation. Overall, the Netherlands has given itself significantly more time to implement the regulation of online gambling. Maybe Germany could have learned from the Netherlands. The current postponement may not be the worst idea for avoiding unnecessary additional problems during difficult times. It is not yet known which companies in Germany will submit license applications for online casinos. But it can be assumed that the large German gaming providers will also try to get licenses for online casinos. Germany is currently still benefiting from the fact that the health crisis hit much less severely than in many other countries. But that can change quickly and then the German gaming providers could also have problems implementing the new requirements on time. So far, however, neither the federal states nor any gambling providers have proposed postponing gambling regulation due to the crisis.

In Germany, it would probably also be much more difficult to postpone gambling regulation. Unlike in the Netherlands, gambling regulation is not simply regulated by a simple federal law. Rather, there is an interstate gaming treaty that must be negotiated by the federal states. The agreement on the new interstate gaming treaty was a difficult birth and the federal states probably do not want to risk that the new interstate gaming treaty could in any way fail due to a postponement. It is to be hoped that the implementation of the new gambling regulation will take place with the necessary pragmatism. It should be made perfectly clear that there will be some adjustment difficulties at the beginning. The new gambling authority will not be at the absolute top level right away. In addition, some questions and difficulties will arise in the practical regulation of online casinos that must be clarified. The great hope of German gambling fans is that there will be first-class online casinos with a German license from mid-2021. In any case, German gambling fans have one advantage over Dutch gambling fans: In Germany, providers do not have to withdraw from the market for a while in order to get a license. There is a transitional regulation, but all online casinos that adhere to this regulation can accept German customers without problems even before the new gambling regulation. At least at this point, the federal states have opted for a pragmatic solution that will not shake up the entire market shortly before the new regulation. It remains to be seen whether Germany can implement the new gaming regulation as planned. The latest news from the Netherlands should at least be a warning that a postponement in Germany cannot be completely ruled out.

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