Betsson is set to re-enter the Netherlands after acquiring a Dutch-licensed B2B and B2C iGaming company in a deal worth €27.5m.
Holland Gaming Technology Ltd is an online gambling operator with a B2C licence in the Netherlands, while Holland Power Gaming B.V. is an online game studio which develops content for the B2C operation.
Holland Gaming Technology operates games via two different websites in the Netherlands, goldruncasino.nl and goldruncasino.com.
Betsson announced today (19 February) that it has agreed to acquire both businesses for €27.5m on a cash-free, debt-free basis.
The acquisition will be financed with Betsson’s own existing liquid assets, the company said.
Of the total consideration, €16m will be paid upfront upon closing, with further deferred payments of €9m and €2.5m to be paid after six and 12 months, respectively.
The acquisition remains subject to post-closing approval by the Netherlands Gambling Authority (KSA).
The integration of the business into Betsson’s operations is expected to contribute to a higher share of revenue from locally regulated markets, the firm said, and is in line with its strategic ambition to deliver profitable growth through geographic expansion.
Betsson in the Netherlands
Betsson withdrew from the Netherlands’ grey market in 2021, when it committed to no longer accepting Dutch customers on its international websites ahead of the introduction of the country’s licensed market.
After the licensed market launched, Betsson applied for a licence in the country, before eventually withdrawing its application in July 2023.
At the time, the company said the process of securing a licence proved to be too lengthy and costly, following “significant delays” in the process.
“The group still maintains the possibility of reapplying for a licence in the future,” it added at the time.
By acquiring an already-licensed business in Holland Gaming Technology, the operator should now be able to re-enter the market in a streamlined way.
The Netherlands Gambling Authority (KSA) has hit the Malta-licensed operator of betworld247.com with a fine worth €900,000.
MKC Limited, which previously operated the BetWorld247 brand under a licence from the Malta Gaming Authority (MGA), was said to have made its products available to customers in the Netherlands despite not holding a local licence in the jurisdiction.
In June 2023, however, the operator’s MGA licence was cancelled and the BetWorld247 brand is no longer active.
The operator had already been hit with a penalty and warning from the KSA last year.
In September 2022, the KSA issued MKC with a cease-and-desist order alongside a weekly fine of €28,000.
It subsequently found in October that the website was no longer accessible from the Netherlands.
Still, the KSA produced a final report on its findings in June 2023, and after inviting MKC to comment on its findings, received no reply.
It has now issued a fine relating to the period during which MKC’s operations were made available to Dutch customers.
During an investigation carried out last year, the KSA found it was able to sign up and gamble on betworld247.com using a Dutch address and banking details, with no technical measures taken to prevent customers in the Netherlands from using the website.
Further, the regulator added that customer ages were not robustly verified by the operator upon creating an account, thus increasing the severity of its regulatory non-compliance.
“At MKC Limited, players could enter an age themselves without clear identification,” said KSA chair René Jansen.
“This means that their website is also accessible to very vulnerable, underage players. This is a seriously culpable offence, which we have also included as an increasing factor for the fine.
“It shows once again that in many cases little attention seems to be paid to the safety of players on the illegal market.”
The KSA calculates fine amounts for non-compliant gambling firms based on their revenue.
A prior report calculated that “a visit from the Netherlands to a website with remote gambling without a licence generates an average of €230.24 in turnover for the provider,” the regulator said.
When comparing that figure against data provided to tax authorities by gambling operators, however, the regulator found that the calculation method used resulted in estimates that were on average 1.84x higher than the actual figure.
The KSA therefore “decided to apply a second correction” when determining the fine amount for MKC Ltd by dividing its estimated revenue from the Netherlands by two.
Using those figures, the KSA determined that from a total of 20,907 visits to MKC’s website from the Netherlands, the operator generated turnover of approximately €2.4m.
In accordance with KSA rules, any company with a turnover of less than €15m annually may be issued with a basic fine of up to €600,000.
To that figure, the regulator then added several increases for further regulatory violations.
For offering prohibited games, the KSA added €150,000 to the fine amount.
It also added a further €75,000 for each of the following additional infractions: charging inactivity fees, placing prohibited conditions on the payment of prizes, offering prohibited methods of deposit, using pre-filled or no playing limits, and a lack of age verification.
Together, those additional infractions led the regulator to settle on a total fine amount of €1.1m.
However, another stipulation in Dutch gambling regulations states that any fine exceeding €900,000 may not be set higher than 10% of the company’s annual turnover.
The KSA said that without further investigation, it could not determine whether its calculated fine amount exceeded 10% of the company’s turnover or not, and therefore set the fine at the maximum amount of €900,000.
The Netherlands Gambling Authority (KSA) has ignited the search for a new chairman as its current leader René Jansen is set to stand down from the role next year.
The term of Jansen’s appointment is set to expire on 1 October 2024, and he has chosen not to stand for reappointment as he will reach retirement age at the end 2023.
The regulator has therefore posted a vacancy for the position, with a new chair set to be appointed for a period of six years by the Netherlands’ Minister for Legal Protection.
Applications are currently open for those wishing to put themselves forward for the role, and will remain open until 12 November.
Jansen intends to resign from the role and allow the new chairman to take up duties before the October end of his term, on 1 July 2024.
“In recent years I have committed myself to the KSA’s mission of safe play with great energy and pleasure,” Jansen said.
“There are many great challenges for the new chairman. The KSA has an important role as a supervisor and enforcer in the various gaming markets.
“This management position is challenging, requires creativity, innovation and decisiveness, but above all has great social value.’
Jansen was appointed chairman of the KSA in October 2018, and has also served as vice chairman and chairman of the Gambling Regulators European Forum during his term.
Prior to those roles, he was vice president and then president of the European Healthcare Fraud Corruption Network, and has sat on the boards of multiple different regulatory and non-regulatory organisations.
He held other roles including with the Dutch government’s Ministry of Social Affairs and Employment prior to those experiences, and has also spent time working as a consultant.
Jansen oversaw the introduction of the Remote Gambling Act and the launch of the Netherlands’ regulated online gambling market in recent years.
In the first half of 2023, under Jansen’s supervision the KSA handed out almost €30m in fines to unlicensed operators accused of offering services in the Dutch market.
Various other fines are expected to be handed out during the remainder of this year.
The Netherlands Gambling Authority (KSA) has suggested that more fines against unlicensed operators will be forthcoming this year.
In a H1 2023 update provided by the regulator, it said that almost €30m in fines had been issued to unlicensed operators at the end of 2022, which were made public in the spring.
“Various fine reports are currently being prepared,” it added, suggesting that more penalties are still to come this year.
A busy year for the KSA
Among the fines already issued to offshore operators was a demand for €900,000 from Malta-based operator Shark77 in January, and a further €900,000 in fines issued to each of two operators behind the Orient Xpress Casino brand in February.
In March, it issued a €4.4m penalty to MGA-licensed Gammix for failing to comply with an order to cease offering its services in the Netherlands.
Then, Videoslots was hit with a whopping €10m fine (among the largest ever issued by the KSA) for allegedly offering its services to Dutch customers without a licence.
The operator denied the allegations and vowed to contest the fine, after describing the regulator’s investigatory actions as “unlawful”.
And it’s not just operators bearing the brunt of the regulatory action. Affiliate group Red Ridge Marketing was also slapped with a €675,000 fine in March, after it was found to be promoting unlicensed operators to Dutch customers.
In addition to issuing fines to operators for offering services in the Netherlands without a licence, the KSA has also been focused on preventing this at source by clamping down on the ability of offshore operators to advertise in the country.
“In many cases,” it said, “this advertisement targets vulnerable players, for example by providing information about how to circumvent Cruks, the exclusion register.”
At the end of 2022, the KSA began an investigation into “the eight most visited websites that, aimed at the Dutch market, advertised unlicensed online casinos and commented on the circumvention of Cruks.”
The investigation remains in progress, it added, but violations have been found at four of the eight websites, and the regulator will take enforcement action against them as a result.
Further, the KSA said it conducted 32 investigations into social media advertising during the first half of 2023, with any violations reported to Instagram and Facebook owner Meta, after which the relevant pages or accounts were immediately closed.
Keeping an eye on crypto
Finally, the regulator explained that unlicensed operators “are increasingly accepting cryptocurrency as a payment method online.”
As a result, the KSA’s investigators have now added crypto to the list of payment methods available to help them determine whether unlicensed operators are offering services in the Netherlands.
During H1 2023, the regulator carried out six separate investigations using Bitcoin, and said that in all cases a sanction was imposed, and the operators in question subsequently discontinued offering services in the Netherlands.
Costa Rica-based online operator Winning Poker Network (WPN) has been ordered to pay a penalty totalling €75,000 by the Netherlands Gambling Authority (KSA).
The operator was found to have accepted Dutch players on its website americascardroom.eu in September 2022 following an investigation by the KSA.
The regulator ordered WPN to stop accepting Dutch players on the website, and subsequently found during a follow-up investigation that indeed players from the Netherlands could no longer access its services.
Following further investigation in January 2023, however, the regulator found that another website operated by WPN, truepoker.eu, continued to accept Dutch customers, and subsequently imposed a periodic fine of €25,000 per week, up to a total of €75,000, on the operator.
The regulator said it will continue its investigation once the penalty payment has been made with the aim of stopping the operator offering its services in the Netherlands altogether.
If WPN is found to be in violation of Dutch regulations again by offering its services without a licence, further enforcement action can be taken.
Meanwhile, Malta-based GoldWin Ltd, was also subject to a KSA investigation beginning in December 2022, which found that there were no technical measures in place to prevent Dutch customers from accessing its website westcasino.com.
The KSA subsequently ordered the operator to cease offering its services to Dutch players, with a penalty fee of €239,000 per week (up to €717,000) set to be enforced if it refused.
A subsequent re-investigation of the operator found the violation of Dutch regulations had ceased, meaning GoldWin did not have to pay the fee.
The KSA noted that the order remains in force, and therefore if the operator allows Dutch customers to use its services in future, the fee will still be imposed.
“It must pay off for providers of games of chance to offer their games legally,” said KSA chairman René Jansen.
“That is only possible if we take the wind out of illegal supply. We are fully committed to stopping these practices,” he concluded.
The Netherlands Gambling Authority (KSA) has released its latest monitoring report on the Dutch online gambling market.
In the report, the regulator sets out key figures and trends up to January 2023, including market size, player behaviour and advertising trends.
Below, iGaming NEXT explores some of the key facts and findings.
GGR in the Netherlands’ online gambling market reached €1.08bn in 2022, with €484m coming from the first half of the year and the remaining €596m in the second half.
Following the end of that period, GGR in January 2023 totalled €124m, up 37.8% on January 2022, at €90m.
Online casino (against the house – including games such as roulette, blackjack and so on) accounted for 72% of revenue in 2022.
Peer-to-peer games such as poker and bingo accounted for a further 2.9% of the market, while horse racing betting brought in a modest 0.3% of the total GGR.
Sports betting therefore accounted for the remaining 24.8% of GGR.
Another way to consider the size of the Dutch market is by studying the number of active player accounts registered in the country.
As of January 2023, the total number of registered accounts in the Netherlands reached 2.1 million, up some 158% year-on-year.
Not all of those accounts were active, however.
In general, the KSA said, around half of the registered accounts are actually used by players, and by January 2023 around 859,000 of the total accounts were considered active, up 75.6% compared to January 2022.
Those figures do not necessarily correlate to the number of active players in the country, and the KSA determined that on average players registered 2.6 accounts with licensed operators.
Based on data commissioned from research institute Growth from Knowledge (GfK), the KSA estimated that there were around 762,000 players using licensed operators in 2022, representing some 5.3% of the Netherlands’ adult population.
Data from GfK also helped the KSA to estimate the rate of channelisation among Dutch gamblers.
Based on a study of just 6,000 people, the regulator suggested it has already surpassed its previously stated target of achieving 80% channelisation after three years in the regulated market (by October 2024).
According to the data, as of January almost 100% of players use regulated operators, though some also continue to use unregulated operators alongside them. Of the total, 92% of players are thought to use exclusively licensed operators.
The channelisation rate steadily increased throughout 2022 according to the regulator’s data. Across the whole year, the average number of monthly players participating in online gambling was 365,000.
Of those, on average 319,000 played exclusively with licensed operators, 34,000 played with both licensed and unlicensed operators, and 12,000 played with unlicensed operators only.
The KSA suggested that the high rate of channelisation had been driven in large part by players who were new to the market.
Of those who played exclusively with licensed operators between October 2022 and January 2023, 61% had not gambled online prior to the opening of the Netherlands’ regulated online market in October 2021.
Only 2% of players who did not gamble online before the regulated market launched also used unlicensed operators during that period.
Of those players who did gamble online prior to the regulated market, 45% had switched exclusively to regulated operators, 22% still played with unlicensed operators alongside licensed ones, and the remainder had not played online during the research period’s last four months.
It should be noted that GfK’s research was based on the online activities of around 6,000 participants, with the results weighted to make them representative of Dutch society and used to make extrapolations about the population as a whole.
Considering channelisation in terms of GGR, the KSA pointed to research from H2 Gambling Capital which suggests around 86% of online revenue from the Netherlands will go to licensed operators in 2023.
The average monthly loss per player account was €143 in 2022, a decrease from the €153 average between October 2021 and July 2022.
Growth in overall GGR was therefore driven by a larger number of players losing less each month.
When accounting for multiple accounts and the fact that not all active players gamble every month, the KSA calculated that the actual average monthly loss per player (during months in which they did gamble) was €310.
Among young adults (aged 18 to 23), a demographic of particular concern to the regulator, losses were significantly lower at €54 per account per month.
Given that the average number of accounts for young adults was the same as for other demographics at 2.6, the regulator concluded that an average young player lost much less every month on gambling than the overall average player.
Still, young adults accounted for 9.4% of GGR in 2022, at €102m, and also made up 9.4% of the total adult population. Among the demographic, sports betting made up a greater proportion of GGR than among older age groups, though online casino remained the biggest generator of revenue among both groups.
Ahead of the introduction of an outright ban on all untargeted advertising – including on TV and radio – the number of advertisements appearing on the internet has been steadily increasing.
The number of posts on Facebook and Twitter by gambling operators has also seen a steady increase through 2022, despite a quieter period during the summer months.
A clear spike, especially on Twitter, can be seen around the time of the 2022 FIFA World Cup.
The number of outdoor advertisements, meanwhile, dropped sharply around May 2022, when members of trade associations NOGA and VNLOK agreed to stop advertising outdoors.
However, the numbers began to creep up again after the summer, when operators not affiliated with the associations began focusing more on outdoor advertising.
The Netherlands Gaming Authority (KSA) has imposed a cease-and-desist order along with a financial penalty warning on Winning Poker Network for operating without a Dutch licence.
The investigation began in September and November 2022 when the regulator discovered that one of the operator’s websites allowed Dutch players to create accounts, deposit funds, and participate in games of chance without any technical measures in place to prevent access from the Netherlands.
After being warned, the company promised to block access for Dutch players, but a recent recheck in January 2023 revealed that a new account could easily be created on another website belonging to the same provider.
The KSA said the website’s terms and conditions did not list the Netherlands as an excluded country, leading the regulator to believe that the website was actively targeting Dutch players.
Additionally, although the website was entirely in English (Dutch was not an option in the language menu), it was still possible to deposit money from a Dutch bank account.
Financial penalty warning
In addition to a cease-and-desist order, the KSA has issued a formal financial penalty warning to Winning Poker Network.
The warning states that if the company continues to offer its services to Dutch players, it will be fined €25,000 per week, up to a maximum of €75,000.
The KSA has been strict in enforcing its regulations, issuing fines totalling more than €30m since the beginning of 2023, especially on unlicensed gambling providers.
Earlier this week, the Netherlands Gambling Authority (KSA) released its annual report for 2022, the first full year of overseeing the country’s regulated online gambling market.
Below, iGaming NEXT breaks down the five most important takeaways from the report.
KSA working through licence application backlog
At the time of the Netherlands’ legal online gambling market launch in 2021, just 10 operators entered the market under KSA licences.
Now, the market boasts 24 licensees, but the authority confirmed it still has 13 licence applications under assessment.
The process “takes a long time and requires a lot of capacity,” according to KSA chair René Jansen.
Many applicants have struggled to get their data properly in order for submission to the regulator, and subsequently failed to meet the requirements for gaining a licence.
Major operators such as Betsson and Entain (excluding BetCity) are yet to re-enter the market on a regulated basis.
Several applications have also been withdrawn or rejected based on background checks carried out by the KSA to assess the reliability of potential licensees.
Indeed, the regulator sets a high bar for licence applicants and has only awarded licences so far to some one in three applicants.
Jansen said: “I believe that setting these high standards is an important condition for a permanently reliable and safe online gambling offer.”
Channelisation around 85%
When introducing the Netherlands’ Remote Gambling Act (KOA) into law, Jansen said its political objective was to ensure at least 80% of Dutch gamblers played exclusively with licensed operators.
After the first full year of operating the market under the Act, the KSA estimates that 85% of players gamble with licensed firms only.
A large proportion of those players had previously played online, the regulator added, but with unlicensed operators.
Self-exclusion rate at 0.2%
Some 35,750 Dutch citizens have registered with the Cruks self-exclusion register, which prevents them from partaking in gambling either online with licensed operators, or in person at Holland Casino venues.
The number of self-excluded players represents just 0.2% of the country’s 17.6 million-strong population.
The figure can also be examined as a proportion of the number of active gambling accounts registered in the Netherlands.
According to the latest report on the matter, published in September 2022, there were a total of 1.3 million player accounts registered with licensed operators.
Of those, 563,000 were active, although the figures do not necessarily relate to the number of unique players in the market, as one player may open accounts with multiple operators.
In any case, the number of self-excluded customers on the Cruks register equates to around 6.3% of the number of active player accounts in the country.
Another market report is expected from the KSA in April 2023, in which more up-to-date figures will be published.
Advertising has ruffled one too many feathers
The KSA said that “the deluge of advertising for online gambling sites in the first months after market opening has not gone unnoticed,” and “has clearly damaged social confidence in the sector.”
As has been seen in several other regulated markets, overexposure to gambling advertising can see both public and political patience with the sector wear thin.
That has played out in several ways in the Netherlands, including prompting the introduction of a proposal for an outright ban on all untargeted gambling advertising in the country.
That proposal is now set to become a reality, after a ban on the use of ‘role models’ such as sports personalities and celebrities in gambling advertising already came into effect in June 2022.
The KSA has already handed out regulatory actions to those in breach of the rules, and said it will continue to closely monitor compliance as the untargeted advertising ban comes into effect.
A further investigation by the KSA to be carried out before this summer will provide more guidance to operators on how to approach compliance regarding their duty of care to customers – covering advertising rules as well as a variety of other requirements.
The 2022 men’s FIFA World Cup saw the regulator take action on non-compliant advertising 13 times with eight operators. In all cases, the companies in question immediately put a stop to non-compliant ads, the regulator said, after it got in contact via either phone, email or letter.
Close to €30m handed out in fines
The KSA issued financial penalties totalling €29.8m in 2022, with most of those issued to unlicensed operators based outside the Netherlands.
However in as many as 40 cases, the regulator was able to change the behaviours of operators through the threat of sanctions alone, it said.
The trend shows no signs of slowing down into this year. Millions of euros in fines have already been issued in the first months of 2023, and the regulator looks set to overtake 2022’s figure before the end of the year.
Recent fines include a €400,000 penalty issued to bet365 earlier this week, for directing gambling advertising and bonuses towards young people.
Another recent fine saw JOI Gaming, the operator of the jacks.nl online casino and sports betting brand, also ordered to pay €400,000 after advertising materials were sent to young people under the age of 24.
Larger fines have been issued to operators not in possession of a Dutch gambling licence.
For example, the Malta Gaming Authority-licensed Gammix was last week ordered to pay €4.4m for non-compliance with a previous order to cease offering its services in the Netherlands.
Meanwhile, a €10m fine issued to Videoslots earlier in March generated significant controversy in the industry.
Videoslots vowed to contest the fine, the largest ever issued by the regulator, describing the regulator’s actions as “unlawful” and insisting it does not target Dutch customers.
Two operators behind Orient Xpress Casino have each been fined €900,000 by the Netherlands Gambling Authority (KSA) for offering online gambling to Dutch customers without a licence.
Curacao-licensed operator Equinox Dynamic NV, and its wholly-owned subsidiary Domiseda and Partners sro, based in Slovakia, were issued the fines following an investigation by the regulator.
The firms’ online casino brand was found to be accessible from Dutch IP addresses, while deposits could be made in euros and customers were able to sign up for accounts using Dutch registration details.
“No technical measures were taken to prevent participants from the Netherlands from accessing the games of chance,” the regulator concluded.
The operators argued in response that Dutch players had been permitted to play on the website due to technical vulnerabilities, which have since been adjusted to ensure access to the site from the Netherlands is limited.
Its data showed that the total number of visitors to the website from the Netherlands in 2021 was 9,565, but that the figure included repeat visits, visits from different devices, web crawlers and other visit types.
Only 29 accounts from the Netherlands had successfully made a deposit on the site during that time, the firms said.
The regulator responded that whether the firms actively targeted Dutch players – or whether they were able to access the site only due to technical errors – was immaterial and that the fines would be imposed regardless of the firms’ intentions.
The operators failed in their responsibility to take active measures to prevent Dutch players from accessing their website, the regulator said.
The minimum fine for such failings is set at €600,000, but the regulator found several circumstances which it deemed worthy of an increase in the fine amount.
The site offered several features, such as autoplay, which are banned under Dutch gambling regulations. It also had a lack of appropriate age verification processes, and withdrawal restrictions, which the KSA deemed “an impermissible disadvantage for the consumer.”
As a result of the mitigating circumstances, fines for both companies were set at €900,000 each.
The ruling follows on from another fine issued by the authority earlier this week, as licensed operator Bingoal was charged €350,000 for failing to check players against the Cruks self-exclusion register before allowing them to take part in gambling.
The operator’s PKI certificate – which is required to ensure the secure exchange of information between operators and the Cruks register – expired for a period of three days in June 2022, during which time the operator should not have accepted new customers as it was unable to check their details against the register.
Customers were allowed to sign up for the website during that period, however, which the regulator judged to be a violation of Bingoal’s responsibilities.
The operator has lodged an appeal against the decision.
JOI Gaming, operator of the jacks.nl online casino and sports betting brand, has been fined €400,000 by the Netherlands Gaming Authority (KSA).
The operator was found to have violated a ban on advertising aimed at young adults after sending promotional messages to its entire customer base without excluding users under the age of 24.
Dutch regulations prohibit operators from sending promotional messages to those aged between 18 and 24, even if they have already registered player accounts.
The violations took place between December 2021 and March 2022, during which time JOI sent direct marketing messages via email to its entire customer base.
“The law explicitly includes the protection of young adults, because they run a greater risk of gambling addiction,” said the KSA in a statement.
The regulator’s chairman, René Jansen, added: “As far as we are concerned, the legislation is crystal clear: no recruitment activities aimed at young adults.
KSA: “The law explicitly includes the protection of young adults, because they run a greater risk of gambling addiction.”
“In December 2021, the Gaming Authority emphasised even more to licensed providers how the provisions on advertising and recruitment activities are intended. The Gaming Authority considers it serious and culpable that this provider nevertheless focused on young adults.”
While Malta-based JOI Gaming said it did not share the regulator’s opinion that it had specifically targeted young adults in its promotional messaging, the operator has not lodged an appeal in response to the ruling.
The operator argued, however, that a lack of clarity in the legislation – principally that advertising efforts may not “target” young people as opposed to a prohibition on advertising “addressed to” young people – led to the violation.
It added that a total ban on advertising for young people would leave them more vulnerable to using unlicensed offerings, as advertising is a key method for encouraging players to use regulated operators.
The KSA responded that the rules are indeed clear and that the violation was evident from its investigation.
It argued that customers under the age of 24 should be treated in much the same way as those who have self-excluded from gambling via the Cruks register, insofar as they should never receive any direct promotional messages from operators.
JOI has ceased sending such messages to customers under the age of 24 as of March 2022.
Last week (19 January) the KSA issued Malta-based operator Shark77 with a €900,000 fine over unlicensed operations in the country.