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The Daunting Task of Liberal Regulation: Can the Netherlands Succeed?
By Shane Addinall Aug 07, 2022 IndustryAs one of the youngest regulated regions in the online gambling space, the Netherlands continues with a positive, although increasingly stern, approach. Are they succeeding in consumer protection with their liberal stance?In a recent interview, Kansspelautoriteit Chair, Rene Jansen commented on the jurisdiction’s trajectory with regulating online gambling. As Jansen mentioned a few times in the past 6 months, certain operators look for the edges of the law and this is not unique to Dutch providers.
His most concerning prediction came true when they launched legal remote gambling and we must consider whether the liberal approach taken in the Netherlands can succeed. Although the Dutch government and inspectorate allowed for freedom of choice in many aspects of their regulated market, recent amendments to marketing laws begin to paint a picture of authoritarian enforcement.
Jansen agrees with the Dutch government’s move to outlaw certain marketing strategies, but only time can reveal the impact on legal channelisation.
Legal Gambling and Freedom of Choice
Following years of discussions deliberating the possibility of legalising online gambling in the Netherlands, lawmakers completed their Gambling Act and enforced it in the last quarter of 2021. Unlike most other jurisdictions where Draconian laws rule the gambling industry, Dutch lawmakers took the road less travelled.
With the aim of providing a safe space for gamblers to enjoy games of chance, the Dutch legal gambling market arrived. A major difference from the get-go was more lenient laws, as the government respectfully allowed players and operators to manage their gambling habits and businesses. Hopefully, like responsible adults and industry leaders.
Most regulated regions impose wager limits on players and force licensed operators to implement these as part of the approval process. The Netherlands veered away from this Draconian approach.
KSA chair, Rene Jansen, expressed the thought process behind this and with the launch of the regulated market said that he’d hoped the Netherlands could become a poster child for what proper gambling regulation looks like.
Market Share: The Big Bad Wolf
Regardless of his support of the liberal regulations, Jansen warned that marketing guidelines must have a stronger approach to ensure responsible advertising. Naturally, it was no surprise to him when operators abused advertising. This rapidly became a thorn in the government’s side.
Shortly after the launch of the Netherlands’ legal online gambling market in October 2021, inconsiderate marketing strategies from licensed operators enraged members of parliament and the public. To say that operators bombarded citizens with gambling media would be an understatement. Considering only 10 operators had licenses at the time, an advertisement frequency of 35 ads between 9 pm and 10 pm, which escalated to 40 ads per hour after that, public outrage was justified.
Instead of taking a responsible approach and monitoring their advertising strategies, operators threw everything they had at the public. Blinded by the goal of increased market share, they missed the golden opportunity handed to them by Dutch lawmakers. A decision that will cost them dearly in the long, it seems.
Failure to Self-Regulate
In the wake of the advertising carnage, the Dutch parliament and responsible gambling associations jumped on the prohibition debate. The self-regulation failures by operators who pushed for the edges led to what Jansen warned was inevitable.
Forcing the hand of the lenient Dutch authorities, operators now face major reforms on advertising laws. The development comes with the exclusion of many major brands in Europe, as they had to withdraw from the market before its launch. Now, close to 30 new license applicants enter a different regulation system.
Jansen argues that the larger operators who self-excluded like Kindred, Entain, and LeoVegas already have a strong following in the region, despite their absence since October 2021. He believes this will be their saving grace and aid in channelisation.
Success for the Time Being
The question of whether the Netherlands created a safe gambling space for its citizens through the liberal approach it took beckons. Some will argue that marketing led to channelisation and aided the government in turning the tide. Gambling harm comes to the forefront of the argument, and according to reports, the numbers remain low.
So far, the KSA is comfortable with the lack of wager limits and although the market is young, Jansen points to success in several aspects. It appears the biggest change on the horizon is the advertising limits, and within these operators still have some breathing room.
Reports on a significant downturn in black market gambling also point to success on the regulator’s part. It may be a while before a final verdict, but as it stands, the liberal approach from the Dutch region presents more pros than cons.
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