CBS: Netherlands poses opportunities but is ‘not for the faint hearted’

As the Netherlands edges closer to the launch of an online betting and gaming market on 1 January 2021, many operators are observing regulatory developments with keen interest.

Speaking on a Microgame-sponsored panel at the CasinoBeats Summit entitled ‘Going Dutch: A great opportunity, but at what price?’, a group of industry experts discussed the potential of the Netherlands market in the context of regulatory changes.

Providing a background to the discussion, Peter-Paul de Goeij, managing director of the Netherlands Online Gambling Association (NOGA), detailed his belief that the Netherlands is a ‘great opportunity’ but at the same time ‘will not be easy and will not be for the faint hearted’.

He explained “In the Netherlands market, in comparison to other European markets, the regulations are very strict and consumer protection really comes first, and NOGA and its members applaud the Dutch government for putting the consumer first, but there are some areas where we could improve the regulations or where we could fine tune them.”

Another point of concern for prospective casino operators looking to enter the Dutch market, de Goeij added, is the high tax burden of 29% on GGR. Additionally, when compared with other European markets, the Netherlands is ‘lagging behind’, de Goeij continued.

Offering his own opinion on the Dutch regulatory climate, Koen Bongers, head of marketing at Blexr, stated that the future dynamics of the netheralnd’s market will be hard to predict, as it will depend on what additional regulations authorities will implement, something he believes ‘inevitably will come’.

“Regulation has a big effect on the channelisation that is likely to occur,” he began. “I see big differences when compared to Germany, because we’re in a very similar stage of regulation right now, is that the Germans over engineered the regulation a little bit too much.”

The regulatory authorities at the Dutch KSA, Bongers explained,  have not implemented some of the same rules as its German counterparts – such as a requirement that slot spins must take five seconds or a €1,000 deposit limit. 

“Whether intentional or not,” he added. “I do think it’s a smart move. I think it’s going to be really hard for them (Germany) to roll back on these types of changes later on. What we see in the markets that are gradually regulating, like the UK and Sweden, is that once they start tightening the bolts it’s going to affect the players.

“If you are going to affect the casinos, it’s going to affect the players, and they are going to be the ones paying the price for whatever a company has to do.”

However, although predicting that further regulation is an inevitability, Bongers maintained optimism on the future of the Dutch market, and argued that the KSA is currently on the right track.

“I would say I think it’s a really good plan that they have right now that the regulation is still fairly open, especially when you look at the areas of advertising as well as Responsible Gambling, when compared to Germany where they already have these €1,000 deposit limits, etc.”

Bongers emphasis on comparing the Dutch sector to the Swedish and German markets was shared by Ruben Gräve, COO at Acroud, who argued that there were important lessons to be learned from both countries.

“I would say that we have Germany and Sweden to look at closely in my view, obviously we’ve learned a lot of lessons in Europe and have gone through these regulation processes many times now.

“I think we are, on one side, very similar to the German regulations in terms of the consumer behaviour, and the penetration of gambling in the market. On the other hand, I think we should compare ourselves to Sweden as well, as there are some very consolidated local operators that will definitely determine the rollout of the regulation in the Netherlands and also how the channelisation occurs.”

Meanwhile, Jaakko Soininen, managing director at Finnplay, argued that the Dutch market, from the point of view of his company, does not differ greatly from other European markets. 

From our point of view, their market (the Netherlands)  is not that different to other model markets mentioned here, like the UK or Sweden . “There’s no huge difference, and there are big lessons learned.”

However, he did acknowledge that the Netherlands will be introducing a ‘max balance limit,’ and noted that he would be observing the player reactions to this with interest.

“That is kind of something that is not seen anywhere else, and it’s going to be interesting to see how players will react to that one, as It’s in the operations, and how they read through that. Basically there might be automatic withdrawals from the paying account, and it is interesting to see how the players will react to that.”

When quizzed on the potential impacts of the 29% tax rate on the Dutch market, with a focus on its implication for effective channelisation and keeping consumers away from black market operators, Grave made comparisons to the Swedish market, where in the latter the tax rate stands at 18%.

“Obviously it’s much higher, and you see in Sweden that the channelisation is occurring and the illegal section is still present in the market,” he remarked. “But on the other side, I’ve been close to many Dutch authorities, lawyers, etc, and the demand for the licences is extremely high. 

“All the big names are partaking, and I can’t wait until they get the licence, I would then refer it back to the player value in the Netherlands, which is extremely high, so I think overtime it will balance it out.”

Additionally, sharing his opinion on the role of B2B companies in the newly regulated Dutch market, Bongers asserted that a ‘trickle-down system’ would be most effective, pointing to its success in ‘other big European markets’. 

“I think it’s good to have the trickle down system that we’re kind of used to in other big European markets, in particular, the operators of casinos, they have huge leverage over their affiliates, because they can withhold payment. Affiliates that are operating in Sweden or in the UK are already very accustomed to obliging to these compliance requests. I think the trickle down system works pretty well.”

The CasinoBeats Summit 2021 conference and exhibition on 14-15 July takes place in an innovative integrated live and digital format. A select audience of senior executives will attend in person at the InterContinental in St Julian’s, Malta, while a global audience of industry professionals will participate in the event online. 

The conference agenda focuses on the next generation of slots and products, key established and emerging markets around the world, leadership in igaming, and marketing and affiliation. The programme also includes the inaugural Game Developer Awards ceremony. 

Register for a free online pass for the event at the CasinoBeats Summit website.

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