Double Dutch: KSA chairman René Jansen on two years of regulated online gambling

On 1 October 2023, it was two years since the Netherlands flicked the switch on digital gambling as the country became the latest – and one of the last in Europe – to launch a regulated market. Overseen by Kansspelautoriteit, or the KSA, this new era under the Remote Gambling Act began with 10 licensed operators as many of the European giants were forced to endure a ‘cooling-off’ period for previously serving Dutch citizens without a licence. Despite the somewhat limited options for consumers at the time – due partly to the fact two out of three applications didn’t meet the high bar set by the KSA and were subsequently rejected – more brands have since received licences. By the start of 2023 there were 24 licence holders (26 at the time of writing), while players held an average of 2.6 legal accounts.  

This market certainly hasn’t been uneventful, though. Standout stories include the ban on role models in gambling marketing from the summer of 2022, while regulated operators suffered a body blow when the government prohibited untargeted advertising from 1 July 2023, meaning they are restricted to options including SEO, PPC, social media and affiliates. TV, radio and print are off limits. The regulator has been busy, too, handing down fines for various infractions as well as hitting illegal operators with substantial punishments for continuing to target and accept Dutch players. KSA chairman René Jansen insists these fines “hurt” but admits that the whack-a-mole-style attempts to supress the black market is a “never-ending struggle”.

EGR: How do you reflect on two years of regulated online gambling in the Netherlands?

René Jansen (RJ): We have had a very dynamic and hectic two years with the opening of the market as we had to intensively supervise the conduct of all operators. We also had to give guidance to the industry on several issues, for example on AML policy, and we issued several warnings on forbidden ads. We also had to issue enforcement action for law infringement and impose fines because of ads targeting young adults.

Meanwhile, we are very happy to see that channelisation of players toward legal operators is now about 90% of all Dutch players. Players know how to find the legal offering, so that’s satisfying. Another positive element is how the self-exclusion register, CRUKS, has functioned. It has seen some 70,000 citizens exclude themselves from online gambling in total, with 50,000 players in the register right now. This shows this instrument is an effective way to provide assistance to problem players or people suffering with gambling addiction.

Of course, you can’t be satisfied with everything. I need to also mention the amount of online gambling advertising and marketing that flooded our country and confronted our society. There was quite a shock in the political environment – with our representatives in parliament – and the government acted quite swiftly. There was a ban on role models in gambling advertising shortly after the market opened and, since 1 July 2023, we have introduced a ban on untargeted advertising. That is a reaction to what people in society thought was a disturbing development.

A second point to mention here is operators’ compliance with duty of care in terms of preventing addiction or excessive gambling. I think that we have seen too many cases of huge losses, often involving quite young people, over a short period of time. That has to be improved.

EGR: You described the two years as “hectic”, but how nerve-racking was the period in the run-up to the regulated Dutch market opening?

RJ: There’s always a bit of nerves when you open a new market, but we were lucky that we had quite some time to prepare for the whole process of licensing operators. So, receiving and assessing applications and issuing licences. You might remember that the online gambling act was passed in parliament in February 2019 and the opening was October 2021. But we had six months to assess the licence applications and build all our IT systems and our self-exclusion register. It was a period that was also quite hectic, but it was not as stressful as we have seen in other countries where regulators did not have as much time to start a new market.      

EGR: The operators that accepted Dutch players without a licence prior to 1 October 2021 had to accept a ‘cooling-off’ period and sit on the sidelines. What impact did this have on the market?

RJ: I’m not sure how it will impact the market in the long run. We started with 10 licensees in October 2021, with some of the pan-European names not present at the time, except for the likes of bet365. The other heavyweights were confronted with a cooling-off period as a result of former illegal activity in the country, so of course that was a setback for them. I don’t think there has been a setback to the market from a consumer perspective, because right from the start there was enough consumer choice. There was enough variety and enough quality gambling products.    

EGR: You touched on the channelisation rate earlier, but how successful has the KSA been at steering consumers away from unlicensed operators?

RJ: Well, I think quite successful. As I said before, channelisation is above 90%. It is up to 98% for new players who did not play in the past before the market legalised. On the other hand, we know there’s always lots of illegal offerings, so we have to target them continuously. We have given many official warnings and many cease-and-desist orders, and we have fined several operators for a total of something like €26m. Next to that, we are targeting the advertising and marketing for illegal operators via social media or in other ways. All in all, I think we’ve been very successful until now but, of course, it is a never-ending struggle. We have to keep fighting the illegal offering.

EGR: In what ways can you educate the public about using the legal options?

RJ: We don’t have any campaigns to make clear to the broader public the differences between legal and illegal operators […] because we don’t want to spread the word about gambling itself. The downside of such campaigns might be that you are advertising gambling, which is not really something many people in our country want, but it might be necessary in the future. We are developing a campaign about the awareness of the exclusion register and the government is thinking about a more wide-ranging campaign to raise awareness of the risks related to gambling. But we see high channelisation and people know how to find the legal offering.

EGR: How is the KSA working with social media platforms and Google to quell the illegal online market?

RJ: When we see an illegal offering on social media – on Facebook, Instagram and others – they cooperate in a very positive way with shutting down certain pages or removing information. It has been a year now collaborating with Meta to remove messages from illegal operators. We have also carried out certain takedown notices related to penalties imposed on websites promoting the illegal offering in the Dutch market. 

EGR: How effective have the fines been in preventing unlicensed gambling sites accepting Dutch players?

RJ: Well, we will have to see how it works out in the long run but, up to now, the channelisation rate reflects our deterrents, or fines. When we introduced our new tougher fines policy in September 2021, the big European and worldwide operators blocked Dutch players from their platforms. So, that was a success. The fines that we now impose do hurt. They hurt in a way that is felt very seriously by the operators concerned.

EGR: But what about the companies that refuse to pay the penalties?

RJ: My experience is that fines imposed on operators far away – outside the EU – are not successful. You might consider countries like Curaçao and others. We have fined some operators who are licensed in Malta, but we will have to see how it works out because we are going through legal procedures. We have imposed those fines, but the operators have appealed. That takes time, of course. 

EGR: In June, the KSA asked the Dutch government to extend the regulator’s powers so it can use false identities for enforcement and supervision of the market. Why would this change in the law assist you?

RJ: We think it makes our investigations more effective. Our inspectors don’t usually use their own names when they investigate certain websites, which is not a problem as long as they do not face any ID checks. If they face a really serious ID check and they are not using their own name, the investigation has to stop at that moment.

So, what we want to do is have some fake IDs to be more effective at entering and investigating websites. It would then give us a certain additional instrument for investigating the illegal offering.

EGR: The Netherlands banned untargeted gambling advertising from 1 July 2023. It’s still early days but what impact do you expect the ban to have?

RJ: The key aim is to have better protections for high-risk players and young adults who are, in a certain sense, more vulnerable to the risk of gambling than other parts of the population. Untargeted advertising was confronting minors, young adults and other high-risk players, which is something the government wants to prevent.

What we see right now is that there is no public exposure to gambling products on TV or radio, in newspapers or public spaces. It gives society a break from the adverts. It’s quite difficult to say what the effect will be on the market, though. We know operators have huge marketing budgets so there might be more investments in advertising in a more targeted way, on the internet and social media, so we will see how that works out and we will monitor it closely.

EGR: Do the operators only have themselves to blame for this untargeted ad ban coming into force, or was the way things panned out unavoidable in the scramble to acquire customers and take market share when the starting pistol was fired on 1 October 2021?

RJ: I wouldn’t use the word ‘unavoidable’ because it’s a free choice. On the other hand, when you open a new market, everybody is fighting for a strong position right from the start. They did have a chance to be far more restrained, and I advocated at several conferences and in speeches to be more restrained when it comes to advertising.

In a certain way, it was expected that it would be quite rough for a society that has not been confronted with online gambling before in this way. So, on the one hand you understand the fight and the struggle for a strong position, but on the other the result is operators have now had a strong setback.

EGR: How do you rate the successfulness of the country’s national self-exclusion register, CRUKS?

RJ: It is very effective but, of course, we don’t know if 50,000 registrations is something we might have expected during these two years, or maybe 70,000 would have been better. We didn’t know before because we didn’t have many situations for comparison, but I must say we are quite satisfied with the steps we have set and how the register has functioned until now. And we are, as I said before, in the early stages of a pilot campaign to raise awareness of CRUKS so it will become better known in society and the target group: the players themselves and also their families and friends, doctors and addiction specialists.

EGR: Some people might argue that if you regulate online gambling then gambling-related harm is bound to rise. Do they have a point?

RJ: What we have heard from addiction care is that the number of people seeking gambling treatment has not changed until now. Of course, the aim of legalising online gambling is that players are better protected by legal and licensed operators than by the ubiquitous illegal operators. As you know, our societies are digitalising very fast. The access to illegal gambling by smartphones or other devices is far easier than it used to be in the past. So, the effect of legalisation has to be that protection standards improve and it is up to the licensed operators to prevent addiction.