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Double Dutch

Netherlands debating online regulations

The Dutch government may adopt the “Danish model” for granting licenses in the Netherlands to online casino operators. Last month, the country’s Justice Ministry ruled that the proposed “Belgian model” might be vulnerable to European Union laws.

Netherlands officials are deciding licensing procedures for internet gambling after restrictions on online wagering were lifted in March. The Netherlands was one of the few European countries to ban the practice, once defending its online gambling ban at Europe’s highest court.

But a new coalition government has reversed the country’s stance to allow online poker, bingo and sports betting, following the lead of countries such as Italy, France, Austria, Sweden and the U.K. Dutch officials are looking to regulate and control online wagering, and are in the process of adopting new licensing procedures.

According to Justice Minister Fred Teeven, those procedures would most likely follow the model employed in Denmark and the German state of Schleswig-Holstein, which offers fewer restrictions than in the Belgian model.

In December 2009, the Belgian Parliament adopted the New Belgian Gaming Legislation, which went into effect in January of this year. Under the law, gaming companies from E.U. member states looking to offer online gambling services must already hold or apply for a license for a land-based gambling operation in Belgium and to (re)locate their server in a permanent establishment on the Belgian territory. In addition, the law provides for a limitation by Royal Decree of the maximum number of land-based licenses for casinos and betting parlors.

These restrictions clearly favor companies already based in Belgium, and seem to be discriminatory toward any foreign operators not yet established in the country.

Teeven has apparently rejected that model in favor of the Danish model, which received approval from the European Commission and was implemented in Denmark in January. In a letter to lawmakers dated May 4 and recently obtained by Gaming Intelligence, Teeven writes, “In the first place, a restriction on the number of operators is unnecessary from the point of view of consumer protection and prevention of gambling addiction. By imposing strict requirements, at least the same level of protection can be attained. The location of servers in our country is also not necessary in order to facilitate strict monitoring.”

According to Teeven, the use of electronic vaults to house encrypted gaming data, which is accessible at all times to the Dutch authorities, would ensure the same level of protection as servers located within the Netherlands. This also applies to the location of the electronic vault, which Teeven proposes should be left up to operators to decide.

The justice minister goes on to question the “extreme inconsistency” of the Belgium model, given that the Dutch restrict land-based licenses and operate a monopoly for casino gaming.

“A model for online gaming as in Belgium would be more difficult to defend for the Netherlands,” Teeven wrote.

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