Dutch Senate Votes Down I-Gaming Proposal

3 April 2008

Holland Casino saw its Internet ambitions dissolve Tuesday as the Dutch Senate, by a narrow margin, voted down a proposal that would have given the state-licensed operator a three-year exclusive license to offer I-gaming services to Dutch residents.

Members of the Eerste Kamer, the country's upper house, voted 35-37 against the proposal, according to Justin Franssen, an attorney with the Amsterdam branch of Van Mens & Wisselink.

Following a lengthy stay in the Senate, the proposal succumbed to both right- and left-wing political opposition, Mr. Franssen explained.

On the right, he said, opponents argued Holland Casino would possess a monopoly over land-based and Internet gambling in the country, a prospect one senator from the Liberal Party (VVD) called "outmoded" during a January debate.

Furthermore, under the proposal, Holland Casino would be granted the license without a tender process, a fact which drew criticism from the Dutch right and the European Commission.

Differently, the left was cautious that the new state-licensed Internet offering could catalyze gambling addiction in Dutch residents, behavior which the government is keen on limiting.

"The left-wing parties, especially, were not too happy with that (increased chance of gambling addiction)," he said.

Whether the vote-down was beneficial depends on who you ask.

Mr. Franssen said the proposal's demise means the Dutch government is likely to avoid new infringement proceedings from the European Commission.

"It (going live with the Holland Casino offering) would have definitely sparked the attention of the commission, as we could see in Sweden, where the commission has a similar issue with Svenska Spel, who established an online monopoly for poker in March 2006," he said.

CryptoLogic, which in February 2007 inked a licensing agreement with Holland Casino, said the decision would have no material impact on its business.

"While advocates of safe, secure and regulated e-gaming are disappointed with the Dutch decision, CryptoLogic never places all its bets on one table," said Brian Hadfield, the software supplier's chief executive, in a prepared statement Wednesday.

"We recognized the challenge in Holland early and prepared our business by accelerating other revenue-generating initiatives."

Meanwhile, Flip Dötsch, media relations manager at Holland Casino, said in an e-mail Thursday that the vote-down means the country's Internet gamblers will continue to gamble with unlicensed, and therefore illegal, commercial operators.

"The main focus of our reaction is that we are very disappointed," he said. "At this moment approximately 400,000 Dutch [residents] gamble illegally online for money with no control and/or protection. By the vote-down of the Senate, these 400,000 online gamblers will remain in an illegal and unprotected environment."

Similarly, Tjeerd Veenstra, director of the state-licensed lottery operator De Lotto, said Wednesday he was "a bit disappointed" by the Senate's decision.

"It (the proposal) was a sincere attempt by our government to start a pilot project for a few years," he said. "During that time, there were all kinds of possibilities to check if the way Holland Casino was handling the Internet was controllable from the point of consumer protection."

Ladbrokes and Unibet, commercial operators whose relations with Dutch officialdom remain strained, were not available for comment.

Mr. Franssen said several of his clients from the commercial sector were "happy" with the result.

Looking ahead, Mr. Franssen said Ernst Hirsch Ballin, the country's justice minister, has not expressed firm plans to reintroduce the proposal.

However, he said that the Gambling Act of 1964 is currently under government review, and that the Holland Casino proposal could be reconsidered once the new act is in place.

"It's a possibility, but I don't see the right-wing conservatives sponsoring such legislation," Mr. Franssen said.

"They're not happy with monopolies, and they're not happy with the way licenses are granted, which is, with the exclusion of all other interested parties."

Mr. Hirsch Ballin was not available for comment.

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.