The current Dutch legislation with respect to games of chance is more than 50 years old. In 2014 the Ministry of Security and Justice published draft legislation regarding remote games of chance, i.e. Remote Betting and Gaming legislation (regulation and taxation). On Thursday, 7 July 2016, the Dutch Gaming Bill (“Bill”) passed Parliament; the Bill will still need to be approved by the Senate in order to be ready to be implemented. Consequently, the expected date of implementation is not clear yet. However, Parliament did mention that the Bill is expected to come into force the second half of 2017.
The Bill aims to regulate iGaming offered to Dutch players, and will have an impact for iGaming operators once implemented.
Below you will find a high level overview of the most important changes and (compliance) obligations for iGaming operators who would like to obtain a license in the Netherlands.
Dutch iGaming regulatory changes
In order for an iGaming operator to obtain a Dutch iGaming license it will need to meet certain criteria. In brief the following is relevant for an operator to know, before it would like to request for a Dutch iGaming license:
- The license requestor (“requestor”) must be a legal entity established in a jurisdiction part of the Treaty on the Function of the European Union or the European Economic Area.
- The requestor must disclose its legal structure and its ultimate beneficial owners, and the requestor is not affiliated with in a formal or factual control structure which creates unclarity regarding the legal structure.
- The continuity of the requestor is guaranteed.
- In case a license is obtained it is important that the licensee organizes the remote games of chance in a responsible, reliable and controllable way.
- Systems and process of the operator need to be controlled by a third party.
- The operator will need to have systems in place for KYC and AML purposes.
- The systems of the operator should also include a systems tracking players, and preventing player addiction.
- Data must be available for the Dutch Authorities (e.g. Gaming Authorities and Tax Authorities) in order to perform an audit.
With respect to the license it is important to know that the Bill refers to certain obligations and limitations, which will be dealt with in implementing legislation (this will need to be published), i.e.:
- The licensee is for a temporary period (period will be dealt with by the implementing legislation).
- The license is not transferable.
- A fee is due in order to obtain a license (this will be dealt with by the implementing legislation).
- The license will state the type of games which can be offered with that license.
Once an iGaming operator obtained a license, it will be allowed to offer remote games of chance to Dutch players.
The latter will have an impact from a Dutch Betting and Gaming Tax perspective.
Dutch iGaming Betting and Gaming Tax changes
Currently, non-resident iGaming operators offering games of chance to Dutch players, are not subject to Dutch Betting and Gaming Tax, as it is the Dutch player, who will need to report 29 percent Dutch Betting and Gaming Tax due.
However, based on the Bill, iGaming operators holding a license will be regarded as taxable persons for Dutch Betting and Gaming Tax (for operators not holding a license the Dutch Betting and Gaming Tax consequences will remain unchanged).
Consequently, in case an iGaming operator (Dutch based or a non-resident company) holds a license to offer games of chance it will need to:
- Register for Dutch Betting and Gaming Tax.
- Report and pay 29 percent Dutch Betting and Gaming Tax over the Gross Gaming Revenue.
- Comply with Dutch formal legislation, in relation to record keeping.
Dutch VAT consequences
Games of chance falling within the scope of the Dutch Betting and Gaming Tax act are VAT exempt in the Netherlands.