Dutch Regulator Reveals New Gambling Penalty System

The Dutch gambling regulator, Kansspelautoriteit (KSA), has announced a new general fines policy, introducing a structured system of penalties for breaches of online gaming law. This new penalty system in the Netherland which came into effect on January 1st, impacts all gambling operators and providers active in the Netherlands.

A Five-Tiered Approach to Fines

The new policy establishes five core categories of penalties, with increasing severity depending on the nature of the offense. Fines can range from a formal warning up to a colossal €4 million. The categories break down as follows:

Category offenses, carrying the largest penalties, will specifically cover breaches of the Anti-Money Laundering and Anti-Terrorist Financing Act.

A Nine-Step Process for Determining Penalties

The Dutch gambling penalty system follows a meticulous nine-step plan to determine the appropriate penalty amount for each violation:

1. Basic Fine: The regulator starts with a basic fine amount within the relevant category.
2. Re-offense: This amount can be doubled if the operator is a repeat offender.
3. Seriousness of Offense: The Dutch gambling regulator fines may be further adjusted by up to 50% based on the severity of the breach.
4. Operator Blame: The fine can again be adjusted by up to 50%, depending on the operator’s level of responsibility for the offense.
5. Operator Size: Fines are proportionate to the operator’s gross turnover. The following percentages apply:
   • Under €1 million: 10% of annual gross turnover
   • €1 million – €2.5 million: 20%
   • €2.5 million – €5 million: 40%
   • €5 million – €7.5 million: 60%
   • €7.5 million – €10 million: 80%
   • Over €10 million: 100%
6. Special Circumstances: Any mitigating or aggravating factors will be considered.
7. Multiple Fines: The KSA will assess whether multiple fines are appropriate for multiple offenses.
8. Potential Increase: Following the assessments in the previous steps, the KSA may increase the fine.
9. Financial Capacity: The regulator will consider the operator’s financial capacity and may offer a payment plan, but this will not reduce the penalty amount.

Michel Groothuizen, chairman of the KSA, emphasised the policy’s importance in the evolving Dutch gambling market.

”KSA is increasingly professionalising as an organisation. After the opening of the online market in 2021, we were given a new category of licence holders. In 2022, we imposed a first fine on a licence holder. We have now gained enough experience to arrive at a well-considered fine policy for both licence holders and other parties. This creates clarity for the parties under our supervision and hopefully motivates them even more to avoid fines.”

Impact and Implications for Operators

The introduction of this structured penalty system has significant implications for gambling operators in the Netherlands. The precise categorisation of offenses and the detailed nine-step process provide transparency, allowing operators to understand the potential consequences of non-compliance.

The emphasis on gross turnover in calculating fines underscores KSA’s commitment to ensuring penalties are proportionate to the operator’s size and financial capacity. This approach aims to create a level playing field while deterring both large and small operators from engaging in illegal activities.

Furthermore, the new policy serves as a strong incentive for operators to prioritise compliance and responsible gambling practices. The potential for substantial fines, especially for repeat offenses or breaches of anti-money laundering regulations, reinforces the importance of robust internal controls and adherence to regulatory requirements.

Operators should proactively review their policies and procedures to fully comply with Dutch gambling law and the KSA’s guidelines. This includes implementing effective age verification processes, promoting responsible gambling, and preventing money laundering and terrorist funding.

The KSA’s increased focus on enforcement, coupled with the new penalty system, signals a clear message that compliance is not optional but necessary for operating within the regulated Dutch gambling market.

Looking Ahead: Further Changes on the Horizon

This new penalty system will play a key role in gambling enforcement in the Netherlands. It also arrives as the country prepares for further changes in its gambling landscape. Teun Struycken, minister for legal protection, recently announced that the government is working on an updated gambling policy, which is expected to be presented in March.

Discussions regarding competition in both the online and land-based sectors are also ongoing, with potential reforms to address the currency market dynamics. Struycken plans to share his vision for the future of gambling policy by March 2025, including considerations of market competition. These developments suggest a dynamic period ahead for the Dutch gambling industry.

Conclusion

The Kansspelautoriteit’s new penalty system marks a significant step towards greater accountability and transparency within the Dutch gambling market. The structured approach, with its tiered five categories and detailed calculation process, provides clarity for operators while simultaneously demonstrating the KSA’s commitment to robust enforcement. The emphasis on proportionality, particularly the link between fines and gross turnover, ensures that penalties are impactful and equitable.

This move, combined with the ongoing review of gambling policy and market structure, signals a dynamic period of evolution for the Dutch gambling landscape. Operators must prioritise compliance and responsible gambling practices to successfully navigate this evolving regulatory environment.

The message is clear. The KSA is raising the stakes, and operators must adapt to this new era of accountability to maintain their position in the regulated Dutch market. Ultimately, these changes aim to create a safer and more responsible gambling environment for players in the Netherlands.

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