GiG Subsidiary Loses Battle Against Dutch Affiliate Punishment

Affiliate marketer Innovation Labs Limited, a subsidiary of Gaming Innovation Group (GIG), has failed in its bid to avoid sanction from the Dutch regulator, it was announced on Wednesday.

The Netherlands Gambling Authority (KSA) has published the details of a long-running enforcement case against Innovation Labs and its parent company GIG, finally rejecting the former’s appeals almost 15 months after the original complaint.

Innovation Labs was reprimanded for its affiliate website, which uses the non-country specific URL ".nu". However, the web address, which uses the Netherlands’ national top level domain, did, and still does, redirect to the site.

According to documents published by the KSA on Wednesday, the website was being used to advertise "illegal" online gambling providers in the Netherlands.

The site was written in Dutch, one of the regulator’s key tests of whether a company can be said to be "targeting" the Dutch market, which in turn was a trigger for enforcement action.

In November 2017, the KSA informed GIG and Innovation Labs that it had two weeks to cease prohibited advertising on and any other Dutch-facing sites or face a fine of €1,500 per day, up to a maximum of €21,000.

However, a series of complaints from GIG and Innovation Labs lawyers prevented the publication of the enforcement action until Wednesday, when the regulator formally rejected those appeals.

It did, however, drop all complaints against GIG, owing to a confusion over which corporate entity had ultimate responsibility for the offending website.

As of time of publication, is still operating and its content is still written in Dutch, although its affiliate links have been replaced with generic descriptions of bonuses and a series of messages clarifying that Dutch legislation prevents it from advertising online casinos.

In a statement sent to GamblingCompliance, a GIG spokesperson said that since December 2017, "Innovation Labs has taken all steps necessary to remove all advertising content from its website and to comply with the order issued by the KSA" and that the Dutch regulator told the company in March 2018 its website was now compliant.

"GIG welcomes regulation and we are pleased with the developments made in the Netherlands in February. We are committed to playing by the rules to secure the opportunity to obtain licences in the regulated Dutch market," said the spokesperson.

The KSA’s decision to go directly after an affiliate, rather than the operators it partners with, is somewhat unusual on the European scene.

"Back in 2017 the Gambling Authority issued a spate of cease and desist notices to affiliates, triggered by advertising for remote gambling operators which had been sanctioned for their offer in the Netherlands," explained Alan Littler, a gaming lawyer with Dutch firm Kalff Katz & Franssen.

"Given the lack of traction which the Gambling Authority often experiences when seeking to enforce against remote operators it turned its attention to hindering their ability to reach the Dutch market. Serving these notices against affiliates is one such approach," he said.

In a brief statement to GamblingCompliance, the KSA made clear that it has not finished exploring the line of attack. "We are going to continue to punish affiliates marketing illegal operators," said a spokesperson.

"Once the licensing regime is up and running affiliate advertising will have to comply with local requirements, and to the extent that affiliates advertise locally unlicensed operators then they can probably expect the gambling authority to be far more active than at present," added Littler.

"The grey zone in the middle will evaporate and it will become a case of being compliant, leaving the market or being on the receiving end of the authority’s enforcement measures.”

Future affiliate offenders may also face stiffer fines, with the KSA recently promising to undertake a wholesale reform of its enforcement policies.