Are cooling-off periods for Dutch licence applicants justified?

With the iGaming market in the Netherlands opening up on October 1st, much scrutiny is on the regulation which will then come into force, particularly the “cooling off period”.

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With the iGaming market in the Netherlands opening up on October 1st, much scrutiny is on the regulation which will then come into force. Peter-Paul de Goeij, managing director of NOGA believes that the effects of the “cooling off period” will be limited to only a few months; up to 1 April next year in the most extreme cases.

Jeroen Verkroost, director of digital transformation at Holland Casino agrees that market forces will cause the strongest players to surface over the next five years. Both Verkroost and de Goeij also agree on the importance of advertising to channel players towards regulated offerings and to offer the best promotions to players, but recognise the importance of avoiding a deluge which could lead to further regulation - so restraint is needed.

Whilst both speakers agree that the consumer protection legislation is one of the strongest in Europe, and is working to protect consumers - the NOGA CEO warns that certain types of sports betting such as corners and under-21 games in football remain off the table.

#This may have unintended consequences of causing players to look towards unregulated offerings which have less consumer protection. Speakers:

Peter-Paul de Goeij, managing director, NOGA (Netherlands Online Gambling Association)

Jeroen Verkroost, director of digital transformation, Holland Casino

How will the cooling off period effect the make up of the market? 

Peter-Paul de Goeij:  I think the effect of the cooling off period on the development of the market is fairly limited. The reason I think that is the case is that some operators will have to wait until they can go onto the market, but we're talking months here.

So in the most extreme case, operators will have to wait until the 1 April next year, and that's when the cooling off period also ends. That would mean that a company applying for license will have a twelve month delay over the operators that have been allowed onto the market quicker than that.

But I think in, let's say, three to five years, that effect will have been completely obliterated by market forces. So although it's not ideal from a competitive point of view, the effects are fairly limited.

Jeroen Verkroost: If you look at it in a five year time frame, I'm sure that you will see the strongest players surface, but obviously it's important to be able to strike the first blow, and it's easier to win a market then to have to win back share from competitors. So there's a definite advantage for those who can be there sooner rather than later.

How important do you both believe advertising will be to private operators?

Peter-Paul de Goeij: I think advertising is absolutely paramount to the success of the Dutch online gambling market. Advertising plays an important role in channeling consumers from an unregulated offer to the regulated offer. So new entrants that come into the market have probably not a very good brand recognition, and it's for them.

It's very important to be able to advertise their offering to Dutch consumers, so they know what they can pick. They know what legal offers are out there.

But having said that at the same time, we should be very careful not to go into the situation that have arisen in Italy and in Spain and to a lesser extent in Sweden, where the deluge of advertising led to a reaction from politics basically leading to a ban of online gaming advertising or to very, very strict restrictions, and that would be really detrimental to the Dutch online gambling market.

So that's why I hope that the industry as a whole can come together and come to, let's say, self-restraint. And the total amount of advertising is not adding up to too much advertising, so we don't cross the line of irritation with Dutch consumers.

What we're pleading for is for the industry to come to a system of volume advertising control in a way to ensure that through self-regulation, we can prevent a ban on gambling advertising.

Jeroen Verkroost:  I agree with Peter Paul that advertising is hugely important to the online gaming market, both because of those who have not really tried out online gaming yet and they need to be informed. Advertising is a great way to do that but also online gaming is very much a market which is volatile and driven by specific bonuses, specific events, and the seasoned players will all be looking at the best deal, the best promotions in order to shop around.

So, yes, advertising is instrumental to this business and I do agree that we need to be conservative as an industry in the way that we leverage this technology that we have here today.

If people feel that we are chasing them around the internet and following them and breaking into areas which are privacy sensitive, that's going to be a huge problem.

Obviously, we are going to show some restraint from the perspective all of casino. We do not wish to get into a zone where advertising starts to feel uncomfortable to our users. But I, on the other hand, realistically in any market in Europe so far where there was no regulation beforehand, we have seen a tsunami of advertising from this branch into the market at market opening. So I don't see a real reason to suspect that it will be any different in the Netherlands currently, unless publishers also take some measures. I know that some of the publishers are doing this, and I think it's very wise thing to do certain TV groups, for instance, limiting the amount of availability within a certain time frame.

I think those are things that we really need to look into, because otherwise we might be ruining around party.

Aside from the KSA comments regarding advertising in the cooling off period, are there any other causes for concern with the recent Act?

Jeroen Verkroost: I don't see it as a cause for concern. I think the legislation is there to protect people in a proper way. We are there to protect our players in the same way. We know that online gaming is completely harmless for over 96% of the audience. We don't see any reason why we wouldn't want to be very careful with that. The remaining 4% who are also instrumental to the survival of our industry at large. So, yeah, I don't see any issues. I think it's good that these restrictions are there and we should mind them.

Peter-Paul de Goeij:  I actually almost completely agree with you. I think it's good that the Netherlands has a very thorough consumer protection system in place. I think it's one of the best systems in Europe. The consumer really comes first. So in that sense, the Dutch regulator deserves praise.

There are some, let's say, unintended risks built into the system. One of them is the restriction of the types of sports betting that you can offer to the public. One of the very, let's say, widely popular forms of sports betting worldwide are actually restricted or even banned in the Netherlands.

For example in the Netherlands regulations, it's not allowed to offer bets on corners in football, or it's not allowed to offer bets on under 21 games.The reasoning behind it is very commendable because, for instance, for the under 21 games, the thinking is that you need to protect young players against corruption, against matchfixing. Of course, we fully agree that you should protect any Sporter against matchfixing and corruption. But if you ban betting on these types of matches, people will find the best that they want to get and they will find them outside the regulatory system in the Netherland and find them at illegal websites.

The problem is that on illegal websites, matchfixing is rampant. There is no monitoring. There is no protection of consumers. So whilst the thinking behind it is commendable and is understandable, it leads to the opposite effect. That’s why we are worried that some of the well-intended measures are leading to less generalization and to less consumer protection.

But of course, we don't have a Crystal ball, so we don't know how things will pan out. We will be closely monitoring and we're also annually researching into the state of the online gambling market in the Netherlands at the online gambling barometer. And if it turns out that measures are going against the reasons we started this whole regulatory program, then we will, of course, help and remind the government that some changes need to be considered.

Register free for iGB Live! 29 September – 01 October 2021, RAI Amsterdam, Netherlands for the opportunity to meet and network with Peter-Paul de Goejj, Jeroen Verkroost and other igaming professionals looking to discuss this topic and take home actionable plans for success in the Netherlands.

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