Kansspelautoriteit (KSA), the Netherlands’ gambling regulator, has instructed hosting provider DigitalOcean to cease offering services to illegal affiliate sites.
KSA issued a binding order to DigitalOcean following an investigation that unfolded throughout 2023. A binding order is usually given in cases where an infringement has occurred, but a sanction is not yet deemed appropriate.
Initially, the investigation focused on two websites – Casinozonderregistration.net and Nieuwe-casinos.net. The regulator was not able to find or contact the owners of the websites. However, it was able to detect DigitalOcean as the hosting provider.
For this reason, KSA’s board decided to issue the binding order to DigitalOcean alleging violations of Article 1, paragraph 1(b) of the Netherlands’ Gambling Act. This section of the Act prohibits the promotion of, or participation in, gambling offered by unlicensed entities.
Upon being contacted by KSA regarding the two websites, DigitalOcean confirmed that it was the host. However, DigitalOcean said it would not cease hosting the websites without a court order, despite KSA ruling that Casinozonderregistration.net and Nieuwe-casinos.net were offering games illegally.
KSA gets the green light from the District Court of Rotterdam
In a letter dated 22 September 2023, KSA confirmed that it intended to impose a binding order. In response DigitalOcean again asked for a court order before they address the case.
The District Court of Rotterdam authorised KSA to continue its action against DigitalOcean on 26 January 2024. In issuing the binding order, KSA instructed DigitalOcean to cease and desist from violating Article 1, paragraph 1(b) of the Netherlands’ Gambling Act by 22 March 2024. This must be done by taking “all necessary measures”. If DigitalOcean does not comply, KSA can impose a penalty or issue a fine.
DigitalOcean can lodge an appeal against this decision. The binding order comes days after KSA entered into an agreement with Cloudflare. Cloudflare will aid in identifying those offering illegal gambling services in the Netherlands.
Latest regulatory action from KSA
The binding order against DigitalOcean follows on from a busy period of regulatory action by KSA.
Last month, it imposed a €19.6m (£16.8m/$21.2m) penalty against Gammix Limited for offering games while unlicensed in the Netherlands. Gammix had been ordered to exit the Dutch market previously and threatened with €1.4m in weekly fines if it did not comply. After this order was not addressed, Gammix was fined €4.4m.
Gammix slammed the fine as “outrageous and unsubstantiated” and vowed to contest the decision.
“The KSA has imposed upon our company a penalty that is both outrageous and unsubstantiated,” said Phil Pearson, director of Gammix, at the time. “Now that we are able to talk openly about the case, we can confirm that we are fighting on all fronts as, to us, this is an extraordinary and unnecessarily heavy-handed action from a regulator that many already regarded as unapproachable.”
Last week, KSA’s monitoring report revealed that the Dutch market now has more than one million active online accounts.
