Subsection a) of Article 1 of the Act on Games of Chance of 1964 (O.J. 1964, 313.) prohibits the organization of games of chance in the Netherlands unless the operator is validly licensed by the Dutch authorities. (Life insurance, certain public loan regimes and private, non-commercial games of chance that are not open to the public, are excluded from the scope of the Dutch gaming regulations, cf. article 2 Act on Games of Chance.) Gaming licenses can only be issued for certain types of games. The policy concerning the granting of licenses in the Netherlands is restrictive and potential licensees must comply with a series of strict requirements. (Gaming licenses are issued by the Mayor and the City Council (maximum prize money of 4.500 euro) or the Department of Justice (article 3 par. 1, Act on Games of Chance). The Dutch Gaming Board advises the Minister of Justice, who supervises the Dutch gaming market, on the issuance of specific gaming licenses.) Moreover, article 1, subsection b of the Act on Games of Chance states that it is unlawful to act as an intermediary for or promote participation in foreign games of chance on Dutch soil. Equally unlawful is the deliberate participation by Dutch consumers in illegal games of chance that are offered in the Netherlands (Act on Games of Chance, article 1, subsection c). The organization of games of chance for private profit, with the exemption of machine gambling outside casinos, is not allowed. Criminal penalties may be imposed on unlicensed operators who provide their services to Dutch residents as well as on local residents who deliberately participate in illegal games of chance in the Netherlands. (Articles 31 and 32 of the Act on Games of Chance.)
For the most commercially important games of chance (casino gaming, national lotteries, sports betting and horse racing) in the Netherlands, the Dutch licensing scheme provides a monopoly or an oligopoly, pursuant to which currently only Dutch registered legal entities are licensed.
Even though the Dutch gaming regulations may infringe on the free movement of services (article 49 EC Treaty) and affect the interests of foreign or non-resident providers and their ability to accede to the Dutch gambling market, a majority of Dutch courts consider the Act on Games of Chance and the related gaming regulations to be compatible with European legislation. The parliamentary history of the Act on Games of Chance reveals that the strict gaming regulations are intended to safeguard the interests of consumer protection and to prevent fraud, gambling addiction and illegal gaming. The parliamentary history of the Act on Games of Chance furthermore reveals certain other reasons underlying the Netherlands gaming regulations, including the prevention of money flow abroad and the issue of fundraising. To require a licence for the organisation of games of chance, subject to a series of strict conditions, is considered by a majority of Dutch courts to be a legitimate and proportionate means of protecting these public interests. Moreover, it is said that foreign providers are not discriminated against, since both foreign and domestic providers can equally obtain gaming licenses. So far, only the Administrative Court of Breda, in a decision of 2 December 2005, has decided that restrictions on gaming activities may be justified by imperative requirements in the general interest, such as consumer protection and the prevention of fraud and incitement of gambling. Such restrictions should however be suitable for achieving these objectives, inasmuch they must serve to limit gambling activities in a consistent and systematic manner. According to the court, the contested decision relating to the issuance of a casino gaming licence failed to specify whether the Dutch regulation on casino gaming is «coherent and systematic» and suitable to achieve the objectives underlying the Netherlands gambling regulations as required for under the Gambelli decision of the ECJ. (Administrative Court of Breda 2.12.2005 (N° 03/1868 WET) Compagnie Financière Régionale B.V. / Netherlands Justice Department.) The court thus decided that the contested decision cannot be upheld and instructed the Netherlands authorities to issue a new decision. In this new decision the Netherlands authorities should answer the question whether the government actions on the regulations concerning casino gambling are coherent and systematic, and evidence of such coherence and systematic structure should be provided. In the event that the coherence and systematic structure cannot be demonstrated, the court holds the view that the justification of the restriction of Article 49 of the EC Treaty contained in Article 27h.1 of the Act on Games of Chance is absent and that said provision should remain inapplicable because it is in violation of Article 49 of the EC Treaty. (No. 2.12: «In het geval die samenhang en stelselmatigheid niet alsnog kan worden aangetoond, is de rechtbank van oordeel dat de rechtvaardiging voor de in artikel 27h, eerste lid van de Wok neergelegde beperking op artikel 49 van het EG-verdrag ontbreekt en dat genoemde bepaling vanwege strijdigheid met artikel 49 van het EG-verdrag buiten toepassing dient te blijven».)
Recent statements of the Dutch government confirm that this so-called «Prohibited unless specifically authorised»-policy of the Dutch authorities (In Dutch: «Nee, tenzij».) with respect to games of chance, prohibiting the organisation of games of chance unless the operator holds a Dutch gaming licence and complies with a series of requirements, is to be pursued in the future. (See “Derde Voortgangsrapport Kansspelen”, T.K. 2004-2005, 24036 and 24557 and infra, II, B litt. a, 1 and II, C litt. a, 1.) A draft law on interactive on-line gaming (Amendment of the Act on Games of Chance, containing temporary provisions on games of chance via the Internet), (Amendment of the Act on games of chance, containing temporary provisions on games of chance via the Internet (in Dutch: Wijziging van de Wet op de kansspelen houdende tijdelijke bepalingen met betrekking tot kansspelen via Internet), T.K. 2005-2006, 30362, nr. 2.) currently pending before the Dutch Parliament, clearly confirms the restrictive gaming policy of the Netherlands. Although the draft law authorises the organisation of on-line gaming in the Netherlands, the operation of these games is subject to a licensing requirement and a series of strict conditions. The license can only be issued to the current licensee of casino gaming in the Netherlands (Holland Casino). The provisions on games of chance via the Internet have been drafted for a period of three years. After evaluation a decision will be made on continuation of this legal provision and the applicable conditions, e.g. the number of licensees. The Explanatory Memorandum to the draft argues that an expansion of the existing sources of gaming services does not contradict the restrictive Dutch gaming policy. (Explanatory Memorandum, T.K. 2005-2006, 30362, nr. 3, p. 3.)
Definitions
Games of chance
Subsection a) of Article 1 of the Act on Games of Chance of 10.12.1964 defines a game of chance as an opportunity to compete for prizes, where success depends completely or predominantly on coincidence and cannot be influenced by the common player.
A pyramid scheme is considered to be a game of chance according to article 1a par. 1 of the Act on Games of Chance.
Life insurance, certain public loan regimes and non-commercial games of chance that are not open to the public, are excluded from the scope of the Dutch gaming regulations. (Article 2 Act on Games of Chance.)
State Lottery
A State Lottery is a lottery pursuant to which at least 60% of the stake money is returned to the participants as prize money. (Article 8 par. 2 Act on Games of Chance.)
Instant Lottery
An Instant Lottery is a lottery for which the draw is made prior to the issuance of the lottery tickets. (Article 14a litt. b Act on Games of Chance.)
The Lotto
The Lotto is a game of chance which requires the participants to predict the drawing lots of a certain number of symbols. (Article 27a par. 2 Act on Games of Chance.)
Charitable Lotteries
Charitable Lotteries are national lotteries, based on article 3 of the Act on Games of Chance licensed for a certain period, with the specific purpose to raise funds for charitable purposes. The percentage of the revenues from sales of tickets to charitable lotteries that must be contributed to charitable causes is 50 %. The licensee decides on the distribution of the revenues.»
Casino Gaming
A gaming casino is a public facility, at which consumers can compete for prize money through the joint participation in a game of chance. Winning depends completely or predominantly on coincidence and cannot be influenced by the players. (Article 27g par. 2 Act on Games of Chance.)
Slot machine gambling
Article 30 par. A, Act on Games of Chance differentiates the characteristics of a slot machine (in Dutch: «kansspelautomaat»), as opposed to a machine of skill without wager (in Dutch: «behendigheidsautomaat»), to which the provisions of the Act on Games of Chance do not apply (article 30a Act on Games of Chance). Machines of skill with wager are subject to all license requirements stated in Chapter VA of the Act on Games of Chance. A slot machine is a mechanical, electronic or electrical process that can result in the distribution of prize money. Success depends completely or predominantly on coincidence and cannot be influenced by the player. The operation of a machine of skill depends on the abilities and the knowledge of the consumer. Participation may not result in the distribution of prize money. (Article 30 litt. b Act on Games of Chance.)
Sport betting
Sports bettings are prize contests, pursuant to which participants are required to predict the results of a sports competition. Horse racing is not considered to be a sports bet. (Article 15 par. 2 Act on Games of Chance.)
Horse racing
Horse racing is every opportunity to bet on the results of a horse race, pursuant to which, after a legal deduction, the total amount of stake money is distributed among the winners. (Article 23 par. 2 Act on Games of Chance.) Horse betting is considered a special form of sports betting.
Bingo
Bingo – a «small» game of chance – may be organised by a Dutch non-profit corporation which has been in existence for a minimum period of three years. The prize money may not exceed €350 per game and €1.400 per session. (Article 7c par. 1 Act on Games of Chance.)
Prize contests
Prize contests (prijsvragen; article 28 Act on Games of Chance) are a scientific, artistic or technical achievement, combined with another obligation, with the aim to win a prize.
Promotional gambling services
Pursuant to article 1, par. 7 of the Code of conduct for promotional games of chance (in Dutch: «Gedragscode promotionele kansspelen») (Article 7, par. 1: «Promotioneel kansspel: het, bij wijze van promotie, geven van gelegenheid om mee te dingen naar prijzen of premies, waarbij de aanwijzing van de winnaars geschiedt door enige kansbepaling waarop de deelnemers in het algemeen geen overwegende invloed kunnen uitoefenen».), a promotional game of chance is a game that promotes certain products or services, in which the participants can compete for prizes or bonuses. Success must depend completely or predominantly on coincidence and cannot be influenced by the player.
Shopping week actions
Shopping week actions are games of chance which may be organised twice a year, for a maximum period of 4 weeks, by a shopkeepers’ association or a group of ten or more shopkeepers having their businesses in adjacent municipalities. (Article 7b par. 1 Act on Games of Chance.)
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