KSA releases new information on igaming licences

11 November 2019

Dutch gambling regulator Kansspelautoriteit (KSA) has released more details about applying for new online gambling licences in the country, saying operators will be able to submit applications as soon as new legislation comes into force.

The Netherlands is due to open a regulated online gambling market in January 2021 after the Dutch Senate in February voted to pass the Netherlands’ Remote Gambling Act.

The Dutch government aims to bring secondary regulations governing the market into force from 1 July 2020, subject to final approval from the Ministry of Justice and Security.

The KSA said while it cannot confirm when the Act will come into effect, it said it is keen to update potential applicants about process. This way, it said, operators will be aware of what they will be required to file and pay as soon as they are permitted to do so.

Four different licences will be available in the Dutch market: 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.

An application for an online gaming licence will cost €45,000 (£38,578/$49,664) and if it is not granted, applicants will not be entitled to a refund. Applications must be written in the Dutch language, while a translation into Dutch must be included alongside all official documents put forward with the application.

Applications will only be processed if they are fully completed, the identity of the applicant is clear and payment has been made. The regulator may request additional information later in the process in order to confirm the applicant’s identity.

The KSA will assess each application to determine whether the operator offers its services in a responsible, reliable and verifiable matter. The regulator said an application could be harmed if the operator has links to parties with criminal, administrative or tax misdemeanours, and any relationships with such parties should be disclosed at the time of applying.

Other requirements include applicants submitting a policy plan setting out how they will ensure their employees have appropriate knowledge of the Netherlands' gambling laws and regulations.

Operators applying for a new licence must not be have been declared bankrupt previously, have suspended payments or had assets seized, while appropriate measures must be in place to ensure players’ funds are held separate from working capital. The KSA said it will consider operators working with third-party funds or a bank guarantee.

Applicants must also have a strategy in place to combat gambling addiction. This should be produced in partnership with industry experts and run in line with the Dutch system of addiction care. A company representative should also be placed in the Netherlands to support this strategy.

Key features of the strategy should include how the applicant makes an effort to protect players against unauthorised participation and gambling addiction, how they intend to help protect 18-24 year-olds against addiction, what prevention measures and provisions are set up, and the training they will provide to staff.
   
In terms of marketing, applicants must disclose their advertising strategy to the KSA. These include how they approach advertising responsibly, how ads are prevented from being misleading and aggressive, how they will prevent incitement to inappropriate participation, how they will avoid targeting vulnerable groups, as well as terms and conditions attached to bonus promotions.
   
All applicants should have in place a complaints system so as to comply with Dutch consumer protection laws, while operators that secure sports betting licences must agree to work with the KSA to help identify match fixing.

Applications must also demonstrate compliance with the provisions of the Durch Prevention of Money Laundering and Terrorist Financing Act. The Act includes measures such as risk management, client investigation, reporting of unusual transactions, retention of supporting documents and training.

Operators should also demonstrate an understanding of the Sanctions Act, which covers global measures in response to a violation or threat to international peace and security.

The KSA also addresses the subject of outsourcing (white label operations), saying that, in principle, licence holders can work with third parties unless the law states otherwise. However, if an operator opts to outsource part of their operation, they must ensure this is in line with certain criteria.

Operators should have in place a policy plan outlining the risk of outsourcing and how they intend to monitor this, as well as a guarantee that the third party is both suitable and reliable for the role. Similarly, an outsourcing agreement should guarantee that the supplier complies with the legal requirements and that the KSA has access to relevant information, while a compliance officer should be employed to supervise outsourced work.

This links in with a request from the KSA to ensure applicants have in place an integrity policy to help prevent fraud. This should be updated on a regular basis to ensure it covers the changing risks associated with the gambling industry.

In terms of payments and transactions, applicants must state how their main payment process works and is reported, how they carry out risk management, what is done if an incident occurs and how they would prevent this from happening again.

Should the operator gain a licence, they must ensure that the properly identify a player before allowing them to gambling. This would include verifying the name, date of birth, address and place of residence of all players, based on a valid passport, identity card or driver's licence.

The KSA also confirmed plans to launch a nationwide self-exlcusion system in the form of the Central Register for Exclusion of Gambling (CRUKS). Currently in development, the KSA said all successful applicants must ensure that they are connected to the system.

In addition, all online gambling operators should have a Control Database, with the KSA able to access this system. This, the regulator said, would allow it to view digital data from licensees and test whether they comply with licence conditions. Technical specifications for the CDB will be announced before applications open.

To support operators with their applications, the KSA will organise workshops for potential licence applicants. The KSA will use these gatherings to provide further information about the application process and what operators can do to boost their chances of securing approval.