Online gambling regulation in the Netherlands has been discussed as far back as 2009, but will only start in October 2021.
Also, licensed operators were different than what the industry expected. Local incumbents Nederlandse Loterij (NLO) and Holland Casino were among them, as well as international brands such as Bet365 and Tombola.
Many high-profile names were conspicuous by their absence. Entain, Betsson, 888 Holdings, Kindred Group and others have pulled out and passively accepted bets from local consumers.
According to Jeroen Verkroost, Director of Digital Transformation, this has caused a “great flood” of players coming to Holland Casino.
“It was a great success, but we were completely understaffed and had to shift from 1st to 5th gear almost immediately, which had some problems,” recalls Verkroost.
Sam Depoortere, business director of the NLO’s Toto sportsbook and casino, admitted it was a “pleasant surprise” for private operators to have to wait for a license.
However, it has not completely reduced the illegal market. Channelization has been particularly affected by illegal operators, especially licensees in Curacao, he said.
“The goal was to have 85% channelization. I think it’s around 65-70%. We still have a lot of groups.”
Phased opening
For Peter-Paul de Goeij, managing director of the operator association Nederlandse Online Gambling Association (NOGA), these factors have led to a “gradual” market opening.
Of course that wasn’t the intention. The intention was to punish operators who had previously violated the rules of prioritization criteria,” he said. It skews the competition in favor of the first wave.
“Previously, it was expected that passive availability for Dutch customers would be acceptable during the application,” he says.
“In mid-September it became clear that [from] In a shocking letter sent by the minister at the time, he instructed the KSA to enforce the regulations more strictly. [they could] Persuading operators to exit the market until they obtain a business license.
“It was a surprise for the market. I don’t think anyone expected it to come.
However, Verkroost is more outspoken against the idea that these international brands have been shut out of the market. “Every brand knew the rules,” he says. “It’s not what happened to them, it’s their fault. It’s not justified to talk about these companies being ‘kicked’ or ‘locked’ out of the market.” ”
The beneficiaries were, of course, as well-established and visible brands in the market, such as Holland Casino and NLO. Since its acquisition by Entain, local brand BetCity is often cited as a separate brand.
Based on figures released by the regulator de Kansspelautoriteit (KSA) in its 2021 report, total gaming revenue for the fourth quarter of 2021 was €185.5 million.
From its opening on October 4th to the end of the year, Holland Casino reported an online GGR of €40.4m, with a market share of 21.8%. Through Toto, the NLO generated €64.6m in the same period, with a 34.8% share.
last minute dash
Toto has been in the market since 1957 and even had an online presence before launching as a monopoly. However, Depoortere notes that there is no in-play betting or casino and no full product offering.
“We’ve grown in that time, but we were single-handedly fighting as we advertised, but we weren’t able to offer the best player experience,” he says. Were there any benefits to being a well-known provider? I don’t know if there were many benefits, yes in terms of building the brand, but not in terms of the product.”
Two years ago, our market share was only around 10%. “There was a massive black market, as you can see from all international operators.”
And while Holland Casino had partnered with Playtech for igaming since 2014, there was little to prepare before the tech specs were announced six months before launch, Verkroost added. increase.
“Developers are developers and they like to see specs before they launch something,” he says. “Part of the spec he released in late 2020 and another part he only released in early 2021, so before we start working on what is allowed and what is not allowed, what kind of It took me a while to find out if I was going to take the test.”
These incumbents have also failed to cross-promote with their retail customer base. “This is also a real disadvantage for incumbents like Holland Casino. As with operators during the cooling-off period, we didn’t have a database to reactivate. We had to start from scratch. ”
NLO, with its limited sportsbook offering, had similar problems. Over a year ago, we launched separate apps for our lottery and wagering products, splitting retail and online.
Together, the two account for 56.6% of the market. This could change as more private operators’ license applications are approved. At the time of writing, Kindred Group is allowed to launch.
It remains to be seen whether the first few months of activity have given local operators a “head start”. “Looking at his few international operators who have been operating illegally over the years, they have built up excellent brand recognition and a strong player base.
“With that in mind, I think we’re probably flattening rather than giving us a head start.”
He is not confident these brands will regain their pre-launch market share. There is none.”
Ads under threat
Their job will be made more difficult by stricter advertising regulations. It took him six months for Legal Protection Minister Frank Welwind to commit to stricter advertising laws.
This is in reaction to a perceived surge in gambling advertising as anti-gambling politicians pressure governments to take action. A decree banning the use of role models in gambling advertising will come into effect from 1 July, with a broader ban on untargeted advertising coming into effect in early 2023.
Whether there was an actual gambling boom is debatable. Mr De Goeij is not convinced. He points to comments by his KSA chairman René Jansen suggesting that his 634,000 accounts were created in the fourth quarter of 2021.
“This does not mean that there are very many players. [on legal sites] in Holland,” Jansen said in March. “Unknown number of players have accounts with multiple providers. So less than 634,000.”
Estimates of over one million online gamblers therefore “seemed exaggerated,” said Jansen.
“I mean, there was no boom,” says de Goeij. “Having said that, perceptions are quite different, especially when it comes to advertising.
“We went from no ads to lots of ads starting October 1st. A 100% increase.”
Depoortere argues that the illegal market has made advertising important for state-owned companies like NLOs to achieve their goals of driving players to regulated services.
“To do that, if you have a market that used to be 90% illegal, you have to advertise to show who is licensed and who is not,” he explains. “As a result, every law firm was bombarded with ads.”
Previously, NLO was the only brand on television. “[Suddenly] Nine more brands have their own promotions and compete in TV advertising. You will notice it obviously. This is a clear result of market opening. All companies that have worked hard to secure a license have the right to advertise. “
Verkroost agrees with de Goeij, acknowledging that the industry ” went from zero to 100 in two seconds”, but needs time for the public to adjust, especially with channelization goals in mind. I admit that
“It’s certainly been a shock to some people, but I think it’s the right thing to do,” he adds. .”
That doesn’t mean licensees and the industry aren’t taking action to reduce advertising. Holland Casino has reduced advertising by 50% compared to its starting volume and has never offered bonuses to under 24s.
“Some competitors won’t back down,” added Verkroost. “It looks like it’s eating away at our market share, but it’s a cowboy world. We want to be cowboys in white hats. We are in agreement.”
Industry-level measures have also been taken, Depoortere said, in part because TV companies don’t agree to set the number of commercials per ad block.
“That’s why we took the initiative to create and are members of Reclamecode Online Kansspelen. [operator association] Vergunde Nederlandse Online Kansspelaanbieders (VNLOK),” he says. “Now there is no radio, no print, no outdoor advertising. Advertising is only after 10pm, not 9pm.”
Reclamecode is developed by VNLOK and supported by NOGA. Mr de Goeij believes these self-regulatory measures address the issue of his remote gambling laws.
“The problem in the Netherlands is that there are rules about the content of advertising, such as ‘self-restraint’. The total amount of advertising is not restricted by law,” he explains. “On the one hand, we ask operators to compete, fight for market share and take responsibility, but on the other hand we don’t want aggregate volumes above a certain level.
“It’s almost naive to think that the industry can guarantee that total volume will get out of hand, especially in a highly competitive market when it opens.”
This could potentially limit impact and could be of concern as international brands eventually secure their licenses.
“If you go into the market and have no advertising potential at all, it will be difficult.
This seems unlikely in de Goeij’s view. It would constitute an unreasonable restriction on freedom of expression. Prohibition is “acting on fear and speculation rather than on facts and figures.”
And even as the market approaches its one-year anniversary, there is still room for upheaval and a wave of new entrants is looming. Depoortere estimates that up to 30 operators may be fishing for licenses.
As a result, advertising problems could get worse, testing the effectiveness of industry self-regulatory measures and new government measures.
Verkroost believes that only consistent high standards will help the industry settle into a rhythm. “We are trying to get to a place where online games are part of society,” he says.
“society [has to be] We recognize that there are risks, but they are actively monitored and mitigated to provide a safe environment for all. “
