The debate over cross-border gambling continues to stir in the European Union, and with various courts addressing the issue, the Netherlands appears to be the most volatile battle ground. The following report provides an update of legal cases pending in the Dutch courts as well as the results of surveys covering the Dutch and foreign gambling markets.
In the Courts
Four potentially decisive court cases for the Dutch gambling industry are taking place this month and next month. Ladbrokes, Betfair, StarGames of Germany and the French casino chain Tranchant are knocking on the courts' doors to break open the state monopoly on gambling in The Netherlands.
Foreign operators collected around 67 million Euros from the Dutch gambling market in 2003 (4 percent of the total Dutch spend of 1.5 billion Euros for the year). The German market alone cashed in some 57 million Euros from Dutch players.
The Court of Justice of the European Communities decided last year in the Gambelli Case that exclusive gaming licenses (such as those held by De Lotto and Holland Casino in the Netherlands) are only allowed when the operators have anti-addiction programs and are trying to reduce gambling.
In the recent court case between Ladbrokes and De Lotto, the Dutch judge
couldn't find anything in the De Lotto's annual report on controlling gambling addiction or the growth of gambling. According to the court's president, De Lotto was clearly committed to turnover growth and aggressive advertising.
It is not, however, a closed case. The Court in Arnhem, which handled the case, gave the Dutch Ministry of the Interior until Oct. 27, 2004, to supply more information on Dutch gambling policies for further consideration.
Meanwhile, Star Games, a.o., an operator active in Germany and Austria, wants to introduce its Internet gambling tournaments in the Netherlands. A Dutch court prohibited the introduction of the product, and the case has gone to a higher court, which will deliver a verdict on Nov. 4, 2004.
Betfair, the betting exchange operator, lost its first court case in the Netherlands, but has lodged a speedy appeal, which got underway this week.
The French casino chain Tranchant, which owns 19 casinos in France, one in Switzerland and four in the Dominican Republic, wanted to start a casino in the south of the Netherlands. The company was asked to obtain a casino license from the Dutch government and was refused. The first confrontation in this case will take place this week in the court in Breda.
According to the Dutch Law, offering foreign games of chance is punishable in the Netherlands, but participating is not.
Research on the Dutch Internet Gambling Market
Commissioned by the Netherlands Gaming Control Board, Motivaction International recently analyzed the Dutch Internet gaming market. The study is conducted on a yearly basis. Its main goal in the analysis of the market in 2003 was to monitor the nature and scope of the market and gauge the extent of problematic behavior.
The group interviewed 8,593 Dutch Internet users between the ages 18 and 55 years old using an Internet-based questionnaire. Around 4 percent of the population stated that they participated in paid interactive Internet gaming. This amounts to around 266,000 Dutch citizens in this age range. The number of participants in paid e-gaming seems to have risen since 2002 (although this cannot be fully ascertained due to a different method of measurement in 2003). The growth of paid e-gaming is most apparent among young men with a low income.
On average, participants spend 42 Euros per month on this type of gaming. Yearly spending in the Dutch Internet gaming market ranges from 50 million Euro to 134 million.
Real-money Internet games are played infrequently on a weekly or monthly basis, and playing time usually doesn't exceed half an hour. The study shows that almost a third of e-gamers participate in these games using a company network, either at work or at home, whether during working hours or after hours.
The study further shows that long-term participation in paid e-gaming is not common. Player turnover is high, and there are relatively few long-term e-gamers.
This year's study served as a first measurement of problematic behavior associated with paid interactive gaming activities via the Internet. A third of participants is at risk of problematic behavior, although actual problematic behavior is virtually non-existent.
Research on Dutch Participation in Foreign Games
The Netherlands Gaming Control Board in 2004 conducted its fifth survey into participation in foreign games of chance. Previous measurements were taken in 1996, 1998, 2000 and 2002. Due to the low percentage of participants in foreign games of chance among the Dutch population, the size of the net random sample survey was small in a number of cases. (In 2004, the sample size was 214). The survey results are reported on the basis of economic units.
The 2004 survey found that 4.7 percent of economic units in the Netherlands had participated in one or more foreign games of chance within the last 12 months--a decrease compared to the previous measurement. In absolute numbers, it involves 391,000 economic units that participate in foreign games of chance.
The survey also found that economic units participate in an average of 1.17 foreign games of chance--slightly lower than the average in 2002. It involves a total of 457,000 participations.
The shares of the foreign games of chance are as follows:
- German lotto via system game (e.g. ABC lotto, Combiplay,
ENI-lotto, Dr. Geissler, ILM club, Lotto Team or StarGames): 20%
- German lotto: 20%
- Süddeutsche Klassenlotterie (SKL): 18%;
- Nordwestdeutsche Klassenlotterie (NKL): 26%;
- U.K. National Lottery: 1%
- Bookmaking (e.g. Ladbrokes, etc.): 2%
- Other: 13%
German lotto is clearly the main foreign game of chance (40 percent of the total). The German games of chance together take up 84 percent of the total foreign games market.
The total amount spent on foreign games of chance in the past year, meanwhile, was estimated at 67 million Euro--around 4 percent of the amount spent on domestic games of chance in the comparable gaming period (2003). The average amount spent per player is about 172 Euro and the average amount spent on each game of chance is about 148 Euro.
The system games are currently responsible for a total spending amount of 17 million Euro, with turnover of 17 million Euro for the German lotto (which reports a total turnover, including system games, of 34 million Euro); 11 million Euro for SKL; and 12 million Euro for NKL. The total combined amount spent on German games of chance in 2004, therefore, adds up to 57 million Euro.
Conclusions
Based on the information it has gathered, the Netherlands Gaming Control Board has a good impression of trends related to foreign games of chance. Overall, the situation seems stable:
- The total amount spent on foreign games of chance is fairly constant.
- The total group of players every time consists of a small part of regular players and a large portion of newcomers who quit quickly.
- There are hardly any shocking developments in the distribution of players over spending categories.
- The German games of chance always form the principal part in the foreign games of chance.
2003 Turnover for National Gaming Monopolies (In Euros)
State Lottery: 699.1 million
Bankgiro Lottery (Novamedia): 79.8 million
Sponsor Lottery (Novamedia): 69.6 million
Postcode Lottery (Novamedia): 362.1 million
Lotto and Sports Betting (De Lotto): 214.2 million
Instant Lottery (De Lotto): 62 million
Horse Betting (Autotote): 34 million
Casinos (Holland Casino) 699.4 million (gross revenues)
Total: 1.52 billion