Kansspelautoriteit Issues €675,000 Fine to NetX Betting for Unauthorized Online Gambling
In a significant enforcement action against illegal online gambling, the Dutch gambling authority, Kansspelautoriteit (KSA), has levied a hefty fine of up to €675,000 (£561,748/$729,183) against NetX Betting. This penalty stems from the operator’s activities on its domains Pferdewetten.de and Betbird.com, where it offered online gambling products without the requisite licenses in the Netherlands. The KSA’s decision also takes aim at NetX’s controversial policy of penalizing inactive players, adding further weight to the penalty.
KSA’s Growing Crackdown on Unlicensed Gambling Operations
The fine issued to NetX is part of a broader trend of stringent measures taken by the KSA against unlicensed gambling operators. Just this week, the KSA warned Winbet, the operator behind multiple gambling sites including Galaxyspins.com, that it may face a fine of up to €840,000 for similar violations. Additionally, last week, the regulator sent a notification to BlokDance, addressing its operation of gambling activities via bc.game and bcgame.lu without proper licensing.
This proactive stance by the KSA reflects its commitment to enforcing Dutch gambling laws and maintaining the integrity of the gambling market in the Netherlands.
The Origin of the NetX Case
The issues with NetX Betting date back to December 2022 when the KSA initiated an investigation into the operator’s activities. It was discovered that Dutch players had access to gambling on the Pferdewetten.de website. The domain primarily focused on horse racing and trotting, which the KSA considers games of chance. Such activities require a license to operate legally in the Netherlands, and the operator only held a license in Malta.
Following its initial findings, KSA conducted a follow-up investigation in April 2023, only to find that Dutch players could still access the gambling site without any technical measures to restrict them. Consequently, the KSA issued a penalty order, instructing NetX to cease all operations within the Netherlands. NetX complied by shutting down the website in September 2023.
However, upon a subsequent review, it was apparent that the site was still accessible to Dutch users, and players could open accounts and engage in gambling activities. Additionally, NetX was found to have launched Betbird.com, which offered similar gambling options. This led KSA to escalate its actions against NetX, culminating in a hearing held earlier this year.
NetX’s Arguments and the KSA’s Decision
During the hearing, NetX presented documentation that challenged the KSA’s classification of their horse betting as games of chance on par with casino gaming. They contended that they had implemented measures to prevent access from Dutch players, citing an IP blocking error as the reason for continued access to the site.
Despite these arguments, the KSA upheld its findings. The authority criticized NetX’s imposition of fines on inactive players—a policy that involved charging users €5 monthly after 13 months of inactivity. While NetX claimed this practice was standard within the industry, the KSA firmly rejected this notion, leading to their decision to hand down the significant fine.
Of the total fine, €600,000 was directly attributed to offering unlicensed gambling products to Dutch consumers, while €75,000 was related to the controversial inactivity charging.
KSA’s Commitment to Player Protection
In response to the ruling, KSA Chairman Michel Groothuizen emphasized the agency’s responsibility to safeguard players in the Netherlands from illegal gambling practices. He expressed concern over operators who neglect their duty of care towards consumers, pointing out that penalizing players for inactivity significantly undermines a protective gambling environment.
Groothuizen stated, "We see that illegal providers often pay little attention to the player and do not comply with a duty of care… If they do not play for a certain period of time, an amount of €5 per month is charged. In that case, a player is punished if he does not participate in the (illegal) games of chance offered. Of course, that goes beyond all bounds."
Conclusion
The fine imposed on NetX Betting not only highlights the KSA’s unwavering stance against unauthorized online gambling but also serves as a cautionary tale for other operators in the industry. As the KSA continues to crack down on such practices, it is clear that compliance with Dutch gambling laws is paramount in ensuring a fair and safe gambling environment for all players. The case underscores the importance of regulatory oversight in protecting consumers and maintaining the integrity of the gaming market in the Netherlands.
