Dutch Gaming Authority fines online betting operators CyberRock and Honeydew EUR 350,000
In its ruling on 18 October 2018, the Dutch Gaming Authority (DGA) fined Curaçao-based CyberRock Entertainment N.V. (CyberRock) and its Cyprus-based subsidiary Honeydew Trading Limited (Honeydew) EUR 350,000 for illegally offering online games of chance in the Netherlands.
The Dutch online gambling market is still closed, meaning that there are only a limited number of licensed operators. New online licences are currently not being granted due to the Dutch gambling regime, which focuses on preventing gambling addiction, protecting consumers and preventing possible fraud and crime. A remote gambling bill that would permit the provision of online games of chance in the Netherlands, provided that a licence has been obtained, is still awaiting approval by the Senate. This new legislation is, however, not expected to come into force until 2020 and therefore betting operators must not offer online betting services to Dutch consumers.
Until the new remote gambling legislation comes into force, the DGA is taking action against operators who specifically target Dutch consumers via gambling websites. To determine which operators the DGA should target, it has developed some so-called 'prioritisation' criteria. These criteria indicate that the DGA will, generally, focus on gaming websites that use a .nl domain, are in the Dutch language, advertise through Dutch media, offer certain payment methods popular among Dutch consumers (such as Ideal), and/or that fail to employ technology to block Dutch IP addresses (geoblocking).
In its investigation into CyberRock and Honeydew, the DGA established that these entities operated casino games such as roulette, blackjack, poker, slots machines and bingo on at least seven websites[1](among other games of chance) between 15 May 2017 to 27 February 2018. According to the DGA, the websites were unmistakably targeting the Netherlands. All seven websites were accessible to users with a Dutch IP address and allowed users to pay via the iDeal system that is solely used in the Netherlands. In addition, several websites were available in the Dutch language and some even automatically changed the language to Dutch if a user with a Dutch player account logged in or registered.
By offering these games of chance to Dutch consumers, CyberRock and Honeydew infringed the Dutch Betting and Gaming Act (WOK). CyberRock and Honeydew did not respond to the DGA, or defend themselves in relation to the DGA's findings. In determining the EUR 350,000 fine, the DGA took into account the seriousness of the violation, the number of websites and games offered, the amount of prizes that could be won, and the maximum stakes, withdrawals, bonuses and promotions included in these games.
This decision does not come as a surprise as the websites of CyberRock and Honeydew clearly targeted the Dutch market and each met at least two of the prioritisation criteria. Furthermore, CyberRock and Honeydew are not the first gambling operators to be fined by the regulator over the past few months – Malta-based companies Betsson and MRG (parent company of Mr Green) were penalised by the DGA for providing unlicensed gambling services. Betsson received a EUR 300,000 fine in August 2018, while Mr Green was fined EUR 312,500 in September (see our Law Now article on 27 September 2018). Until the new remote gambling bill comes into force, similar enforcement actions by the DGA are to be expected in relation to well-known operators in the Netherlands that meet one or more of the prioritisation criteria.
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