Industry questions KSA approach as regulator imposes €26m in fines
The Netherlands Gaming Authority (KSA) has imposed fines totalling more than €26m across five different operators.
Which operators have been fined?
The penalties were handed down to each operator for allowing consumers in the Netherlands to gamble online with their services despite not being licensed in the country.
N1 Interactive was on the receiving end of the biggest fine at €12.64m for a repeated violation, after a fine had already been imposed by the KSA previously.
N1 said it categorically disagrees with the KSA’s considerations that led to the alleged violation as it had taken several measures to prevent participation from the Netherlands.
“Moreover, N1 feels the KSA has adopted an incorrect and baseless calculation to determine the amount of the fine, making it disproportionately high, which contradicts the legal basis for levying and calculating a fine under Dutch law,” said the operator in a statement.
N1 has objected to the ruling and has activated both administrative and judicial proceedings.
Then came the much-disputed and much-discussed penalty of €9.87m for Videoslots, which the operator has labelled “unlawful” and vowed to challenge in the courts.
In its case file, the KSA insisted Videoslots’ online gaming services were available to Dutch consumers, while the operator claims the KSA was only able to access the site after “mystery shopping” as a German consumer.
Why have the fines been described as unfair?
This method of investigation has been described as “absurd” and “a joke” by industry insiders on LinkedIn, while some have even called the process “entrapment”.
Videoslots bore the badge of a Dutch-licensed operator despite not being licensed, which despite not being ruled as a violation, was still considered an aggravating factor by the KSA, although the operator said the mistake was rectified swiftly.
The KSA, which was able to register an account and deposit with a Dutch IP address that was created from the Netherlands, has claimed that no technical measures were taken by Videoslots to prevent participants from the Netherlands from accessing its site.
By the KSA’s own admission, however, Videoslots had removed the sign-up option for Dutch phone numbers, so the regulator’s mystery consumer instead used a German one:
Videoslots will contest the ruling and CEO Alexander Stevendahl said it was “important to stand up for what’s right” in a LinkedIn post of his own.
The early reaction online suggests that Videoslots will have many industry allies by its side.
The letter Videoslots sent in response to the KSA said: “The report was drawn up carelessly, is not objective and is unclear in a general sense. There is no actual assessment of the factual findings against the legal and policy framework; scary.”
The KSA uses annual turnover from the Netherlands to determine the scale of its fines. It is unclear which number was used for Videoslots, which is privately owned and unlicensed in the Netherlands.
According to Videoslots, their turnover figure was determined “incorrectly and carelessly” by the regulator.
Will the fines be challenged?
BP Group Limited, which trades as PressEnter Group, also received a fine of €1.79m, while Probe Investments (€1.13m) and Fairload Limited (€900k) completed the set.
In the case of PressEnter, the KSA said it was able to make a deposit of €10 from a Dutch bank account and that “Netherlands” was offered as a drop-down option at several stages during the sign-up process.
In a statement provided to iGaming NEXT, PressEnter said it disputes the basis of the fine as well as the KSA’s investigation.
KSA chair René Jansen: “We mean business. Player safety is paramount. A fine is to hit where it hurts, so in the wallet.”
“As soon as the company received notification from the KSA of a possible breach, the company took immediate action and adopted a strict interpretation,” said a spokesperson.
PressEnter has also pledged to challenge the decision and will pursue legal action to obtain clarity if necessary.
The KSA reiterated that offering online gambling to players in the Netherlands is only permitted with a licence, and that strict rules apply to ensure there is a safe legal offer where players are assured of a fair game and are protected against gambling addiction.
KSA chair René Jansen said: “We mean business. Player safety is paramount. A fine is to hit where it hurts, so in the wallet.”