EUROPE POKER LAW INDEX

Netherlands Poker Laws

Windmill and Flower Field in HollandIn spite of being a pretty liberal country generally, the Netherlands is surprisingly quite restrictive when it comes to gambling and poker in their country. It’s not that they don’t have gambling in the Netherlands, but it’s certainly anything but wide open and accessible and what they have is pretty much limited to land-based gambling, at least as far as doing so and staying in compliance with the law goes.

It is legal to play on an online poker site as long as that online poker site is hosted and licensed in the Netherlands. The problem is that there simply aren’t any such sites, as the state run company that handles gambling in the Netherlands for betting other than sports betting, Holland Casino, simply does not offer online betting. (1)

There are some Dutch online sites that would like to receive a license to operate in the Netherlands, and given that the opportunity does not currently exist for this have tempted the authorities by offering online gambling anyway, but were hit with heavy fines for promoting their online gambling through advertisements.

Holland Casino does have a monopoly on non sports betting gambling in the Netherlands, so if they don’t offer online play, no one else is allowed to, at least at present anyway.

A company called De Lotto has the rights to all sports betting in the country, other than betting on horses, which is handled by a third company. They do have an online site where people can wager on sports, but aren’t allowed to offer poker on their site so it is confined to sports betting only.

So Holland Casino is the only place you can play poker legally in the Netherlands right now, and although they have expanded their poker offerings at their 14 casinos around the country in response to public demand, many players still aren’t happy and would like to see more live poker in the country, and would prefer that other companies be allowed into the market and the monopoly that Holland Casino currently enjoys being done away with. (2)

There are some Dutch online sites that would like to receive a license to operate in the Netherlands, and given that the opportunity does not currently exist for this have tempted the authorities by offering online gambling anyway, but were hit with heavy fines for promoting their online gambling through advertisements. (3)

The Dutch government has also sought to get financial institutions within the country to block payments to offshore gambling sites, which in spite of not all of them being willing to comply, has managed to slow down the online poker and online gambling market somewhat at least.

While this never really works to shut down online poker, as we saw quite clearly in the United States, it does keep many casual players away who may not be familiar though with workarounds to this, so while this does have an impact on the market, it doesn’t really stop anyone who is willing to use indirect payment processors rather than seeking to go directly from the Dutch financial institution to the poker site.

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Upcoming Changes In The Netherlands Online Poker Market

The EU would also like to do away with the gambling monopoly in the Netherlands and have been putting pressure on the Dutch government to change this, as they have been doing for some time with other EU member countries that still maintain gambling monopolies.

So the Dutch are finally in the process of implementing the desired changes and finally coming up with a regulatory scheme that would allow for other companies to obtain a license to offer poker and other forms of gambling not currently offered online in their country.

At last count, over half a million Dutch residents partake in online gambling in spite of the law not permitting it. So in looking to regulate this, this presents to the Dutch government both the opportunity to tax this online play and also to have more control over what is offered their residents, at least in terms of the participation of licensed online sites is concerned. (4)

It is hard to imagine what governments are thinking when they assume they can simply make online gambling go away by decree, and while this might work well enough for curtailing land based gambling activities, it simply does not work that well with online gambling.

So it is expected that sometime in 2015 we will see the first new sites being licensed by the Dutch authorities, and one of the impressive things about their approach is that they are realistic about market capture here and also realize that they are still competing with offshore interests even with licensing and regulation.

So they have set a goal of 75% market share with their regulatory scheme, and realize that their offer must be attractive enough to make this realistic. This by the way is a higher percentage than you see with some of the earlier countries that did this such as France, Italy, and Spain, although the idea here is to look to learn from the mistakes that were made there, and it certainly was the case that these countries were far too complacent and perhaps even naïve in assuming that regulation would simply make the offshore sites magically go out of the picture.

They seem to be modeling their scheme at least somewhat on the Danish strategy, and have in fact adopted the 20% tax rate that the Danish have, which has proven quite successful there, in contrast to some of the larger tax grabs that some other countries seek, which simply reduces compliance.

We’ll have to see whether or not the Netherlands uses ring fencing to limit licensed sites to offer play to residents of their country only or whether they will allow them to play on the main sites of licensees. This of course depends in part on who gets the licenses as well, as unless the licensees actually have main sites or not is yet to be determined.

It would be a mistake not to open things up though and this would certainly negatively impact the market share that regulation would have, particularly in a country of modest size like the Netherlands, as they don’t have the player base that other larger countries like France, Italy, and Spain have, and even there the size of the markets has been an issue.

In the meantime, even the Dutch government realizes that players have a choice to play on offshore sites now and will continue to have this choice after regulated poker becomes put into place in the country, so the hope and perhaps the expectation is that this will be a pretty player friendly setup, and if not, well the offshore sites aren’t going anywhere.

References:

1. Overview of Online Gambling in the Netherlands

2.  Dutch Citizens to Get More Live Poker

3. Dutch Gaming Regulator Cracking Down on Unlicensed Gaming Operators

4. Regulations: The Netherlands

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