KSA Fine Could Jeopardise Betsson’s Dutch Future

A €300,000 fine for Betsson’s Dutch-facing subsidiary may torpedo the Swedish operator’s chances of acquiring a licence once long-awaited online gambling legislation is approved by parliament.

On Friday, the Dutch Gambling Authority (KSA) issued a penalty against online operator Corona for what it said was the unlicensed provision of online games of chance to Dutch consumers.

In a press release confirming the fine, Corona’s parent company Betsson said it was still assessing whether or not to appeal the sanction.

The Stockholm-listed operator said it purchased Corona in 2014 with the intention of applying for a licence once re-regulation laws were approved.

At the time it was expected that online licensing legislation would pass in 2015, but the process ground to a halt shortly after that and has only recently been revitalised.

“Betsson shares the KSA’s ambition to achieve a high channelisation of customers into any future locally regulated environment in the Netherlands and supports the Dutch Government’s ambition in moving forward with the legislative process,” said Pontus Lindwall, Betsson CEO.

However, Lindwall’s hopes of taking part in the liberalised Dutch market may have already been dashed.

In a letter sent to the upper house of parliament in July, justice minister Sander Dekker said that any company that had previously been fined by the KSA would be automatically excluded from obtaining a licence.

Dekker added that simply having accepted customers from the Netherlands would not exclude an operator from taking part in the licence application process, but would factor into the regulator’s assessment.

Despite the justice minister’s hardline comments, Dutch legal expert Justin Franssen said that there was still hope for Betsson and others.

A licensing ban as a result of having been fined “is not hardcoded into the [online gambling] bill”, he said.

“The minister's comments are important,” added Franssen, a partner at law firm Kalff Katz & Franssen, “but also bear in mind that the KSA is an independent regulatory body and they have discretion. Although it's not going to make life easier for those who have been fined.”

The details of how licence applications will work have yet to be hammered out by the KSA, which is scheduled to launch a consultation on the process at some point in the future.

The government has stated its desire to drive as many players as possible towards licensed operators once legislation is passed, a process known as channelisation.

However, the burgeoning nature of the Dutch grey market means that a certain amount of past behaviour will inevitably have to be overlooked, said Franssen.

"If they are strict in applying the suitability test then basically no-one will get a licence and the government's channelisation objective will be unachievable,” he said.

It is also possible that although Corona may be frozen out, the fact that Betsson avoided a direct fine could mean it can continue to do business in the Netherlands through a different subsidiary.

The KSA has warned that it will take enforcement action against companies that use Dutch web addresses or typically Dutch marketing materials without an online gambling licence. Currently, only monopoly operator Nederlandse Loterij is permitted to operate online in the Netherlands.

Corona, which is licensed in Malta, operates two brands: Oranje Casino and Kroon Casino. The sites are hosted on dot.com domains, but both brand names are Dutch, using the words for "orange" and "crown" respectively.

In July, the KSA issued a €410,000 fine against German operator Bet-at-Home for what it said was a targeted approach to acquiring Dutch customers.

n its press release announcing the Corona fine, the regulator said that gambling operators should be using geo-blocking technology to prevent Dutch-based users from accessing their websites.