KSA claims victory in gambling advertising case

24 January 2020

The Council of State, the highest administrative court in the Netherlands, has ruled in favour of national gambling regulator the Kansspelautoriteit (KSA) in a case concerning the use of text-based promotions for online games of chance.

The KSA had argued that using promotional articles to publicise online games, which are currently prohibited in the country, was a form of advertising and as such should not be permitted.

The Council of State agreed with the regulator's assessment, ruling that promotional text falls under the same category of advertising and is not allowed under current laws. The decision supports an earlier ruling made by the District Court of The Hague in February 2019.

The original case related to incremental penalty payments that the KSA had issued to Content Publishing Limited, a subsidiary of Betsson, in 2017, after the regulator said the operator had published promotional articles for online gambling on various websites.

According to the KSA, visitors to the Content Publishing websites were able to click through to the sites where the illegal games of chance could be played. The KSA said it issued the penalty payment to Content Publishing in an effort to halt such activities, having previously warned the operator about its conduct.

Content Publishing had argued in the District Court of The Hague that the KSA’s definition of promotion in the Gambling Act was too broad and that its articles constituted editorial information, rather than advertisements.

However, the Court disagreed, saying in its ruling “the primary objective (...) was to forward potential players to providers of online casino games” and that the KSA rightly regarded this as promoting illegal gambling. The Council of State ruling supported this initial decision.

In a statement issued after the Council of State hearing, the KSA said the social interest of informing the consumer about commercial practices that violate the current Gambling Act “outweigh the importance of Content Publishing to prevent disclosure”.

The Dutch gambling market is set for major change in the near future, with the Remote Gaming Act due to come into effect from 1 July 2021, which in turn will open the country’s regulated market.

However, before it can be implemented, secondary regulations published in June last year must be passed, while licensing conditions must also be finalised.

Should the Act come into effect, four different licences would be made available: casino games where consumers play against the operator (such as slots and table games); peer-to-peer casino games (online poker). Licences for betting on sporting events, and betting on horse racing and trotting, will also be on offer.

Earlier this month, it was also revealed the KSA imposed fines worth a combined €3.5m (£3.0m/$3.9m) in 2019, a 105.8% increase from 2018. In total, the KSA issued a total of 10 fines in the year.

KSA chairman René Jansen said that the increase in fines was due to stricter enforcement of rules and higher penalties against targeting Dutch players with online gambling offerings in the lead-up to the opening of the Dutch regulated market next year.