toleRaBle BehaviouR
Attempting to impose restrictive regulations upon a borderless, slippery technology sector appears to be a thankless task, but one the Dutch government is determined to pursue to protect its citizens and tax revenue.
The Dutch are renowned for their tolerant attitude to life, as a stroll around the beautiful canals of Amsterdam makes clear to any thrill seeking tourist. However, the traditional tolerance disappears dramatically when it comes to the online gambling market, but this is slowly changing. The 1964 Betting and Gaming Act set the tone for the restrictive approach by the Dutch government, establishing virtual monopolies for Dutch based businesses involved in land-based gambling. As the 1964 Act predated online gambling by some 30 years, later modifications in the interpretation of the existing law allowed gambling services to be provided on the internet, but only by existing licensees and only within their original remit. Currently there are five exclusive licences held by Dutch monopolies and regulated by the Netherlands Gaming Control Board.
Although only these licensed (monopoly) operators are permitted to offer their services to Dutch citizens, many offshore operators have for many years targeted the Dutch market via telephone betting and the Internet. In 2005, De Lotto, the Dutch sports betting monopoly commenced legal proceedings against one such operator, Ladbrokes, in the Dutch Supreme Court. The court sided with the Claimant and ordered Ladbrokes to place blocking measures in place to prohibit Dutch citizens from placing bets on their site and to seize their telephone betting operations. Ladbrokes appealed the
in 2008, the euRopean commssion
challenGed the
RestRictive dutch ReGime in a ‘Reasoned opinion.’
decision and the case was referred to the European Court of Justice (ECJ) by the Dutch Supreme Court for a preliminary ruling under Article 324 EC. The seven year battle finally ended last year with a victory for De Lotto when the ECJ ruled, as in the Betfair case, that licensing restrictions were “justified on the grounds of consumer protection and the prevention of both fraud and incitement to squander money on gambling, as well as the need to preserve public order…a Member State is therefore entitled to take the view that the mere fact that an operator such as Ladbrokes companies lawfully offer services in that sector via the internet in another member state is not sufficient assurance that the national consumers will be protected.”
In 2008, the European Commission challenged the restrictive Dutch regime in a ‘reasoned
opinion’ (which usually precedes a court case in the ECJ), suggesting that it was contrary to the spirit of European law and stated reasons as to why. In a series of complicated and technical exchanges, the Dutch government has stubbornly denied all allegations mentioned in the ‘reasoned opinion’.
In the same year, another British operator, Betfair, also began legal action in the national courts against the Dutch government, after the operator was denied Dutch a sports betting licence. They argued that the rejection amounted to a breach of their freedom to provide services and their free movement of capital. As done in the Ladbrokes case, the national court referred the Betfair case to the European Court of Justice (C-203/08) in 2009, for clarification on whether Dutch law was incompatible with European law. Following on from the landmark 2009 bwin Santa Casa decision, the ECJ gave its opinion that the Dutch government may justify the controversial restrictions due to the need to protect the public from gambling addiction and fraud. However, any future tendering procedure must be done in an open and transparent manner. It may be some time still until Ladbrokes and Betfair are able to obtain Dutch licences.
In 2009, in response to the growing popularity of illegal gambling sites that target Dutch citizens, an advisory committee, the ‘Jansen
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