As from 1 April 2012, the Netherlands will have a new regulatory authority: the Betting and Gaming Authority (Kansspelautoriteit ('KSA')). The KSA will monitor the compliance with the laws and regulations in the field of betting and gaming, including promotional games of chance. The rules on (promotional) games of chance will be enforced more strictly as a consequence hereof. Upon violation, the KSA may impose high penalties. Furthermore, as from 1 April 2012 new rules will enter into effect with respect to marketing and advertising around games of chance and the 'levy on games of chance' will be introduced. It is expected that the KSA will soon show its teeth. Experience has shown that promotional games around big events (think about the approaching European Football Championship and the Olympic Games) draw attention particularly.

Task of KSA

The KSA will monitor the compliance with the Dutch Betting and Gaming Act (Wet op de Kansspelen ('Wok')) and the Code of Conduct for Promotional Games of Chance (Gedragscode Promotionele Kansspelen). Promotional games of chance are games of chance that are organised to promote products, services and/or enterprises. Promotional games of chance are a popular marketing tool for many enterprises.

Furthermore, it will be the KSA's task to provide, amend and withdraw licences for the various forms of games of chance.

The KSA will also have the specific task to discourage the addiction to games of chance by inter alia the provision of information and advice. For that matter, the obligation will be imposed on the providers of games of chance to take measures and provisions in order to prevent the addiction to games of chance as much as possible.

Marketing and advertising

As from 1 April new rules will also apply to marketing and advertising around games of chance. This way, in publicity for games of chance particular information will have to be provided, including the statistical chance of winning a prize. Furthermore, specific standards will apply to misleading advertising and publicity activities for games of chance. In it, it is inter alia explicitly provided that publicity may not wrongfully create the impression that a participant has already won a prize or that the participant will certainly win a prize.

Sanction Power KSA

The KSA will have the power to impose serious sanctions, such an administrative penalty up to an amount of EUR 780,000.- or, if this is more, 10% of the (net) annual turnover of the infringer. The implementation of this new legislation also provides for amended criminal enforcement tools for the Dutch Public Prosecutions Department, by means of which penalties and prison sentences may be imposed. However, criminal law will only be deployed in the event of concurrence with other offences – like laundering – and in case of a repeated offence. 

Modernising Dutch Betting and Gaming Legislation

The institution of the KSA forms the first step in the modernisation of the laws and regulations regarding betting and gaming. In the future, the games of chance policy in the Netherlands will be amended by inter alia the introduction of a more transparent licence system and the lifting of monopolies, if possible. Furthermore, the Dutch Code of Conduct for Promotional Games of Chance will be amended. It will also become possible to offer games of chance online. At present, this is prohibited. Recently, the Dutch Supreme Court imposed a prohibition to provide online games of chance to the Dutch public on the English provider, Ladbrokes. In the future, the option will start to exist both for Dutch and foreign operators to legally provide online games of chance in the Netherlands. It is expected that a legislative proposal for this will appear in the course of 2012.

Levy on Games of Chance

To finance the KSA, a new levy will be introduced with the name 'levy on games of chance'. The levy on games of chance will be levied on certain providers to whom a licence has been granted in the meaning of the Wok. The levy will be calculated over the amount of the sold participation confirmations or the number of gambling seats. As an indication: the levy on games of chance amounts to EUR 1,000.- if the nominal value of the participation confirmations exceeds EUR 1,000,000.- but not EUR 5,000,000.-. The levy on games of chance may mount to over EUR 50,000.-. For gambling machines meant to be erected in slot machine arcades, the levy will amount to EUR 80.- per gambling seat. The levy will be levied besides the tax on games of chance. This means that this is an increase in the financial burden of providers.

More information?
For more information regarding the KSA and (promotional) games of chance, please contact:

Roelien van Neck
+31 (0)70-353 89 50

For more information regarding the levy on games of chance and the betting and gaming tax, please contact:

Arnoud Knijnenburg
Tax adviser
+31 (0)70-353 88 04

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