Dutch Supreme Court Ruling: What It Means for iGaming Operators | Ep. 810
In this episode, we explore the landmark Dutch Supreme Court ruling on online gambling contracts, its implications for operators, and the broader European regulatory landscape. Join us for an in-depth analysis of legal, market, and regulatory challenges facing the iGaming industry.
Key Topics
- Dutch Supreme Court ruling on gambling contracts
- Impact of the ruling on online gambling operators
- European regulatory landscape for iGaming
- Legal history and context of Dutch gambling laws
- Market implications for Dutch and European operators
- Potential legal actions and consumer claims
- Harmonisation challenges within EU gambling laws
Host: Charlie Horner
Guest: Ted Menmuir
Producer: Anaya McDonald
Editor: Anaya McDonald
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Charlie Horner (00:01.23) The Supreme Court of the Netherlands has delivered a landmark ruling declaring that contracts between online gambling operators and the customers under the previous Games of Chance Act of nineteen sixty four cannot be declared void. Under the ruling, operators who are in the Netherlands before the enactment of the COAR Act of twenty twenty one do not need to reimburse customer losses. So how crucial is this ruling and what does it mean for the changing landscape of European regulation?
Welcome back to iGaming Daily, supported by Optimove, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and today I'm joined by our editor at large, Ted Menue. Ted, how's things?
Ted M (00:47.091) Good, good Charlie following a very early start today. yes. We got a big shit here in England. We're at quarterfinals now.
Charlie Horner (00:54.338) Yeah.
Charlie Horner (00:59.202) Indeed,
Ted M (01:00.115) It's too early to say it's coming home. Who knows?
Charlie Horner (01:01.794) Yeah, heroic.
No no, no. No, let's we'll we'll r let's revisit that this time next week, Ted. Let let's we we might be a little bit more giddy this time next week. But in the meantime, big big news coming out of the Netherlands. and this is something that we've we've been keeping a little eye on for for some time now. So what we like to do on on these cases sometimes is go back and have a little Ted Memor history lesson. So what what's the background to this case and and
Ted M (01:17.075) Sure.
Charlie Horner (01:32.982) What was the Supreme Court ruling on and and why is this so important?
Ted M (01:37.371) Okay, this, I mean, disputes on consumer relations and consumer engagements with online gambling licenses have, you know, have just dogged.
the Netherlands is a judiciary and like legislative procedures. And I think following like a number of civic actions, the Supreme Court of the Netherlands was asked whether gambling agreements made before the Dutch online gambling market opened on the 1st of October, 2021. So the launch of the Remote Gambling Act, COA, were automatically void because operators did not hold a Dutch license and continue kind of referred to what was called the WOC Act of 1960.
That held no legislative ground for any type of online gambling. So following much consideration, its determination to put simply is no. The absence of a license did not by itself make the contracts invalid, meaning that players cannot automatically reclaim historic losses on that basis.
Put simply, it's a win for Dutch licences that waited 10 years for online gambling rules to be settled by the KMA and a loss for reformists that have really sought to punish licences for previous actions.
Charlie Horner (03:00.119) Yeah, I guess this is indicative of how long it took to actually establish the the Kohra regime in the first place. we we had Frank Opteverd on the podcast after the the Dutch elections last year and we sort of did a bit of a deep dive into how that regime came into play, and I think it's safe to say that it took a little bit longer than anyone would have liked, didn't it?
Ted M (03:09.202) Hmm
Ted M (03:21.33) Oh sure, sure, and this was again recognised by the Supreme Court that the majority of licences did transition to legal status, they had even applied kind of a pre-market rule, they've even been in conversations with the government about moving towards kind of temporary licences or being in a period of grace during that transition that were kind of grand.
to them, so they had actually made an effort to speak to the government, to speak to regulators about their position in the market. Put simply, the court found that the structure of the old WOC Act did not show that gambling contracts could be void.
or could actually take in the presence of what online gambling is. So how can customers actually then claim for, reclaim for, for react retrospective losses prior to the markets opening.
Charlie Horner (04:16.789) Mm-hmm. Yeah, look, I don't expect you to to know the ins and outs of a sixty year old piece of legislation from the Netherlands. But but to me it seems quite fanciful that you can impede or sort of punish operators for not having a Dutch licence when the Dutch licensing regime didn't actually exist at the time. Is is that sort of the crux of the argument when it comes to this ruling?
Ted M (04:20.482) Wait.
Ted M (04:44.422) Yeah, I think you hit it on the head. you know, there are kind of, there's, I'd say, of kind of boundaries and remits to this. But the primary objective is that it took a long, long time for the Kmart to settle.
I mean operators were already active in the operators, allows for licensing. The other fact that here that there was no at no point was a discussion on any kind of retrospective penalties, financial penalties being applied when they enacted co-op. Yet there was also determination that there was a form of punishment. So in the case of Kindertroop who now FDJ, they were restricted from the market for eight months and had to clean kind of data.
before launch. So there was a penalty given to operators that played in there. There was also all these fair market clauses on how operators could go to market. So there was a cleansing of the market prior to launch.
Charlie Horner (05:48.558) Mm-hmm. Okay, so there was a there was a cooling off period that meant that these operators had to sort of adjust to the to the regulations before that they they actually could go live. so that does seem like a yeah, kind of a punishment in in terms of you lose that first mover advantage that you might once have had.
Ted M (05:50.928) Yeah, yes.
Ted M (05:58.93) Mm-hmm.
Ted M (06:07.345) Mm-hmm.
Charlie Horner (06:08.359) nevertheless it is a a huge sigh of relief for some of the biggest operators in Europe. You you mentioned their kindred group now now under the the ownership of FDJ United. I guess first of all, you know, who who are some of the other operators embroiled in this and how big of an impact would it have been if they would have been mandated to pay back all those sort of legacy bets? This would this sort of be a
you know, a c a crisis financially for these operators.
Ted M (06:36.632) yeah. Okay, so in terms of the liability, I think the liability is spread throughout kind of every operator active, currently active in the Dutch market. And again, look, the one we reported on here, and it's kind of the biggest, it's the Dutch consumer agency of Dynamite had sought a 70 million pound payout.
from Unibet on this dispute alone. And it of represented 2,500 former players who wanted retrospective winnings from FTJ United, who are now the parent company of the Unibet brand. And that alone kind of tells us the liabilities at play had the determination gone the other way.
It was definitely something that I think a lot of operators were kind of bringing out and a concern for them in whether they kind of proceeded or would I think would definitely just, you know, exited the market had the determination played fallen on the other side.
Charlie Horner (07:44.716) Mm-hmm. Yeah, you you mentioned their two and a half thousand claims. I I would hazard a guess that if if the ruling would have gone the other way, y there would be a huge coup of of lawyers with getting ready to file a Class Act lawsuit to to to to swell that way above two and a half thousand. So yeah, perhaps a a disaster avoided there for some of the operators. What what
Ted M (07:57.362) I didn't love you too yet.
Mm-hmm.
Charlie Horner (08:09.025) What happens next, Ted, in terms of this story? Is it is this just you know, a line underneath this? You know, d do these claimants have any action that they can take? Is there anything any more consumer groups can do, or is the Supreme Court's ruling sort of final under Dutch law?
Ted M (08:26.115) It is under Dutch law. Now, if these kind of consumer groups, and this happens time and again in Europe, not just starting gambling, if they want to take it to the Supreme Court of Europe and get it reviewed there, that procedure can take place. But again, these are very long affairs. It's really down to the stomach of how...
know, the legal representatives want to take this and whether kind of all these consumer agencies or reformist groups see that there's a way to overturn the appeal at a European level.
Charlie Horner (09:03.501) Yeah, I th I think the that's one thing to really keep an eye on is what what happens at the European level. And we'll I'll tell you what, Ted, we'll take a quick break and and we'll come back and we'll talk about some of the ramifications of this case, not just on a European level, but just in the the wider context of the Dutch market. So John is after the break and we'll we'll d dive a little bit deeper into this.
{Break}
Welcome back to iGaming Daily. Today we're talking all about the Supreme Court of the Netherlands and its decision to well its decision to essentially tell operators that they don't have to pay out thousands of players for for for the last for the last decade, essentially. So n not not a small piece of news, Ted. but I I just wanted to talk about some of the ramifications and and to place this in the wider context of what's happening in the Netherlands because
Ted M (10:55.238) Mm-hmm.
Charlie Horner (11:03.658) We know that the Netherlands is is quite a difficult market for a lot of operators to do business. there's you know, taxes are near forty percent now. There's an ad ban on the way. Perhaps we could just give listeners a bit of an update about what the state of play is in the Netherlands in regards to regulation and and the legal side of things because there's some more updates that are taking place during twenty twenty six, isn't there?
Ted M (11:27.107) yeah, for sure. And in terms of the decision itself, I think this removes somewhat of a major kind of legal overhang. But it does not fix the kind of operating environment in what is, you know, the conditions that Dutch licences are going through. Look, the Netherlands remains a very kind of high pressure market. Taxes risen consecutive two years. The advertising freedoms are just non-existent.
and again they're to be reviewed and it's likely looking towards a total prohibition. Also we're now looking at kind of a much tighter tighter squeeze on bonus and custom and bonus and introduction of of deposit limits. Also much more scrutiny on under 24 accounts.
These are kind of the, this is going to be the mould of the new co-market. It's very restrictive, hard scrutiny, hard surveillance of licences. It's definitely one of Europe's toughest markets.
Charlie Horner (12:33.44) for sure. For sure it i it has to be given sort of those squeezing constraints that've that sort of impounded that market over the last couple of years. it strikes me as well that the Netherlands is sort of Europe's poster child for regulation done badly. we we see it in the in the UK, in in sort of some of the debates that we see, where, you know, on one side of the d the debate, proponents of increased regulation and tax say
Ted M (12:36.527) Hmm.
Ted M (12:40.654) Yeah.
Charlie Horner (13:01.888) Well, look at the Netherlands, they they've done it, so why can't we do it here? But then on the other side the industry say, Yeah, well th th they have done it, but look at channelization rates, they're hovering around fifty percent. That is not good enough, in terms of player protection and things like that. So how how do you how do you view the Netherlands in terms of where it stands as a in in terms of regulation across Europe? Is it you know, is it the poster boy?
Ted M (13:09.253) Mm-hmm.
Ted M (13:28.145) I mean, there's so many kind of examples that can follow that up. So can say, no, you've got Germany, you've got Poland. But I think that...
The Netherlands is unique because it had a very positive start and it's just got every year slowly worse. Actually not every year, just every month it's got slowly worse. It's really kind of been dragged by this kind of reformist overload. And the Dutch model kind of started with very strong channelisation ambitions, but it's kind of moved and I think it's now kind of the proof is in that number you stated, 50 % of
every euro spent is going towards the black market and it's also a market that started with very strong licenses coming in. It was competitive, it was structured well, I liked actually the use of the cooling off period and it had some you know some positive kind of regulations or kind of well thought regulations about what makes a fair market and that's kind of completely been lost.
Look, all eyes are kind of pointing towards the K-MAR, what the kind of new liberal coalition agrees on to go and proceed with the gambling overhaul of the co-market, but the signs aren't positive. I don't think that anyone's kind of viewing Dutch developments with bright eyes.
Charlie Horner (15:01.812) No, no certainly not. I mean that that channelization figure is is stark. And I think every piece of regulation that you work towards has to has to have the the view or the question, how do you improve that channelization rate? Because without that going in the right direction, you know, you you can't guarantee the the safety of your of your players and and therefore your citizens. So I I hold out hope, but not not too much. but that's just one sort of bit
Ted M (15:05.604) Mm-hmm.
Charlie Horner (15:30.217) Extra piece of context that I wanted to to bring into this conversation. Th the other is, we mentioned the European level earlier before the break. we know that there are other cases like this going through the European courts at the minute. Namely there's there's things going through the courts with regards to Malta, Germany, and Austria and and whether and I think that all comes down to Malta's Bill fifty-five and and the repercussions around that. Do you think that this case in the Netherlands
Ted M (15:32.7) Okay.
Ted M (15:38.416) Mm-hmm.
Ted M (15:45.936) Yeah.
Charlie Horner (15:58.665) Maybe not not creates a precedent but but at least has a an influence at the European level and and how do you compare and contrast the two cases?
Ted M (16:10.49) Does, okay, I think the Dutch determinations to some degree will be influential on the determinations, but it will never be binding. And again, this is much more about kind of the structural issue with gambling regulation in the EU, which there are kind of zero harmonised properties in there. And again, this is even with the judgment of the CG, the Court of Justice.
they always come because he's kind of like, OK, yes, we determined that a European member state court can apply for retroactive losses. However, it's still the determination is that these are European businesses that were looking for licences, right? And that that determination here is kind of so deep because there's no kind of this, you for the last 20 years, there's been no harmonised law for European gambling. So we're
can you actually kind of process these, you know, these court filings, right? Where can you actually enforce them and at which point? The other factor here is that I think we return to this point where it's kind of the Dutch market, the German market in Austria. Now...
Germany's fourth interstate market was botched from the start. Austria has taken 20 years to even begin to debate online gambling laws. At one point, you had to sit back and say, well, there is no framework here for clear determination on this.
Charlie Horner (17:52.254) Yeah, it's I think it yeah, it's indicative of that lack of harmonisation across Europe. W I mean the the reports, you know, that the European Commission is looking to to do at least some harmonisation, I think, on on taxes. We've we've mentioned that the podcast fairly recently and we'll we'll I think we'll we'll do so again. what another thing that really strikes me about this well these two cases that we've mentioned here.
Ted M (18:05.561) Yeah.
Charlie Horner (18:18.205) Is that maybe this is an unintended consequence of the sort of re re-regulation of gambling markets, not just in Europe, but around the world. You know, we we're w we're one of the k core themes of this entire decade is the the creation of these national frameworks for online gambling regulation. do you think w we might see more cases or similar cases a around the world in terms of these markets where they've transitioned from grey to to white markets? And is that something that
could be a risk for for operators who are looking to to expand globally.
Ted M (18:52.56) I think for the industry it's a certainty. Legal fallouts, legal conflicts have no kind of geographic boundaries. So I'll put it as simply as that.
And look, we see this every time the market moves from so-called grey market tolerance into a licensing regime. It creates legal concerns, legal ponderings, and legal questions over the regulation that was in place before. Look, the latest one here is clearly Lula in Brazil.
a year after the launch of the bets law, he wants to of repeal and replace it. And he now kind of wants guarantees on debt protections going forward. It's so, so much of a successful market and I really am beginning to see this in kind of 2026. It's also down to kind of
political appetite or kind of political stomach for just letting laws settle and markets be markets and come into play. And I think that's kind of been lost in gambling in the past five years of, you know, regulatory overhaul across multiple jurisdictions.
Charlie Horner (20:12.809) Yeah, no, absolutely. look, Ted, I think we we've run out of time for today. it's a really interesting case though, and yeah, it might might provide a little bit of a sigh of relief for for operators in in the Netherlands. So yeah, there's a little a little bit of good news for for everyone involved there. But for today, thank you very much, Ted. Appreciate your time and your thoughts on this one. Thanks to Optimu for supporting the show as always, and to our listeners, thanks for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date.