The ruling of the Netherlands’ East Brabant district court against de Kansspelautoriteit, a gambling regulator in charge of Nederlandse Loterij could have far-reaching consequences for its monopoly.
The KSA rejected two unidentified companies’ applications for instant lottery, sport betting, and lottery licenses on the 4th of September 2022.
KSA responded by arguing that the license had been issued to a third-party – Nederlandse loterij – and was only allowed to be granted to one entity per the policy of monopoly.
In its response, KSA called the Netherlands gambling policy “horizontally coherent”. In response, the claimants argued that this had not been the case ever since the Remote Gambling Act was implemented in October 2021.
Also, they cited rulings made on 2 May 2018 as well as 10 March 2021. In 2018, the ruling maintained the status quo for instant and sports lotteries, while in 2021, the Dutch gaming market was opening. The second decision allowed the lottery to retain its monopoly, while also allowing charitable lotteries.
Dutch gambling policy is no longer consistent
The court found that the Dutch Remote Gambling Act, on which KSA based their refusals, did not conform to Article 56 of the Treaty on the Functioning of the European Union.
The TFEU’s article 56 prohibits any restrictions to the provision of services in EU Member States.
In the end, the court determined that Dutch gaming policy was “no more horizontally consistent”, in its “current status”.
The ruling stated that “[the] court takes note of the current gambling policies, following the KOA Act’s entry into effect, which has a single license system for land-based gaming of chance, with a lower risk of addiction, and a lesser chance of criminal activity.”
While the open licensing system of online gambling is a system that has a higher risk of addiction, and criminal activity.
The court found that this lack of consistency, when viewed against the backdrop of legal changes in relation to the KOA Act’s entry into effect and the effects of its entry, renders Dutch gambling policies no longer horizontally coherent.
It was accepted by the court that a licensing system monopoly is not required to protect “public interest” in gambling such as the protection of customers or the operation of land-based gaming.
Questions arise from the ruling
The court found that preventing operators from providing services outside of a system of monopoly “is not proportionate” because it doesn’t guarantee general objectives on a systematic basis.
Court ruled that the KSA had no right to refuse the applications for licences on the grounds Nederlandse Loterij already has approval to run lotteries in this market.
Now the regulator has 12 weeks in which to review both applications. Court is well aware of potential consequences, noting that “this decision has major implications for the licensing of three country-based gambling games”.
KSA is also liable for court fees of EUR 1,750 plus EUR 365, payable to the two plaintiffs.
Dutch Lottery currently holds all three monopoly licenses available across the three categories – Krasloten Toto Lotto.
