Dutch Gaming Authority sanctions bwin, Unibet and takes action against affiliate marketing websites: who's next?

Netherlands

The Dutch Gaming Authority (DGA) has recently imposed fines of EUR 350,000 and EUR 470,000 on online betting operators ElectraWorks Limited who operate the website bwin.com (bwin) and Trannel International Limited who operate the website unibet.eu (Unibet), for illegally offering online games of chance in the Netherlands. Separately, the DGA announced that 23 affiliate websites stopped advertising for gambling sites after the DGA informed them that the sites’ activities were illegal and threatened them with sanctions.

Bwin and Unibet

It is currently still prohibited to offer online gambling services to Dutch residents but this will change if and when the Remote Gambling Act comes into force (currently expected at the end of 2020 or the beginning of 2021). Until then, the DGA is taking action against operators who specifically target Dutch consumers via gambling websites. This has led to numerous sanctions in the last couple of months. As a consequence, these sanctioned operators will not immediately be able to acquire a Dutch licence when the market opens. The legislator chose to introduce a so-called “blackout period” of two years during which no licence will be granted to operators who have actively and specifically been (illegally) targeting the Dutch market.

To determine which operators the DGA should target, it has developed some so-called 'prioritisation' criteria. These criteria indicate that the DGA will, generally, focus on gambling websites that use a .nl domain, are in the Dutch language, advertise through Dutch media, offer certain payment methods popular among Dutch consumers (such as IiDeal), and/or that fail to employ technology to block Dutch IP addresses (geoblocking). In its investigation into bwin and Unibet, the DGA established that both websites were undeniably targeting the Dutch market and offering – amongst other things – sports betting and casino games to Dutch residents during at least several months in 2018. Both websites were, according to the DGA, undeniably targeting the Netherlands because the websites were accessible via a Dutch IP address and permitted users to pay via iDeal. Unibet had a Dutch customer service for customers.

By offering these games of chance to Dutch residents, the operators infringed the Dutch Betting and Gaming Act (WOK). In determining the amount of the fines, the DGA took into account the seriousness of the violation, the number of websites and games offered, the amount of prizes that could be won, and the maximum stakes, withdrawals, bonuses and promotions included in these games. The DGA also took into account the fact that bwin and Unibet could both charge money to players for having an account although being inactive – this sole fact justified an increase of the penalty amount. The difference in the amount of the fines between both operators is assumingly because the research of the DGA revealed that Unibet offered more games and bonuses and showed more advertisements than bwin.

The decisions are bad news for both operators, especially because it is questionable whether an appeal (if any) will lead to a different conclusion, as it is not in dispute that the operators breach Dutch gambling regulations and Dutch courts have until now consistently ruled that the enforcement policy of the DGA is reasonable and acceptable. As a consequence, both operators will probably not be able to legally enter the Dutch market at the moment that the Remote Gambling Act comes into force. The fact that a number of members of the Dutch Lower House recently raised parliamentary questions regarding the absence of effective age controls for minors by Unibet and bwin in the past, will likely not be of help to their position, although also a licensed Dutch operator (Toto) was accused of not preventing minors from entering games of chance.

It can be expected that the DGA will continue its enforcement initiatives and that more sanctions will follow in the coming months. The decisions once again confirm that operators should refrain from using iDeal technology and other tools for the Dutch market, although we think that it might already be too late for operators to amend their behavior because the DGA has probably more sanctions coming up based on investigations in the past.

Please find our recent article about the draft secondary legislation respect of Dutch Remote Gambling Act here: https://www.cms-lawnow.com/ealerts/2019/08/draft-secondary-legislation-in-respect-of-dutch-remote-gambling-act-published.