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KSA cracks down on unlicensed gambling with Tipico fine

| By Daniel O'Boyle
Dutch regulator de Kansspelautoriteit (KSA) has fined operator Tipico €531,250 for illegally offering gambling to Dutch customers, just one week before the country’s igaming market opens.

The decision follows an investigation by the KSA that started on 10 January, 2020. This investigation found that the Malta-licensed Tipico.com was accessible from Dutch IP addresses, and that the Netherlands was an option in “a number of menus” during the sign-up process. 

It added that at no point did the site say that players from the Netherlands may not participate in online gambling, though the site’s terms and conditions did state that “players may only use the services that Tipico offers if the laws of the country from which those services are used allow”.

In addition, it said Tipico offered a number of products that would not currently be permitted in the Netherlands, such as online casino and live sports betting.

In a number of follow-up investigations over the year, the KSA found no change in these areas. 

During one of these investigations, a KSA supervisor successfully deposited €10 using e-banking tool Sofort.

“After the supervisor clicked on ‘Deposit € 10.00’, a Dutch language menu appeared,” the KSA said.

As a result of this, the KSA requested further information about Tipico’s transaction history. Tipico then revealed that in the period from 30 April to 31 July 2020, a total of 4,974 transactions involving Dutch bank accounts were processed.

In September 2020, another supervisor was able to register for a Tipico account from the Netherlands.

The regulator also claimed that there was no evidence that Tipico verified customers’ ages.

After receiving a report about these issues in December 2020, Tipico provided its response in January 2021. In it, Tipico argued that there was no violation because its offering was not targeting the Netherlands, citing a 2005 judgement involving Ladbrokes. It noted that the only message in Dutch was from its payment processor, and that it did not use Dutch symbols or Netherlands-specific payment tools. Tipico also asserted that it did indeed verify customer ages.

The regulator noted that, when tackling unlicensed gambling, it “focuses in the first place on all providers who offer specific and unmistakable focus on the Netherlands”. However, it said that the country’s Gambling Act – which entered into force earlier this year – makes clear that while those specifically targeting Dutch customers are the primary focus, the distinction is “irrelevant” in determining whether an operator’s offering is illegal.

The regulator also noted that Dutch language was present when depositing to Tipico, and said it did not matter that this had been because of a third-party supplier. It also pointed to the fact that the Netherlands was an available option in sign-up menus.

The regulator added that Tipico’s claim that it did verify ages “had not been substantiated”.

As a result, the KSA opted to fine Tipico. Under the criminal code, the maximum possible fine would be €870,000.

The regulator opted to start with a €200,000 fine for the act itself of offering unlicensed gambling. It then increased this by €75,000 each for offering live bets and online casino. A further €75,000 was added for including an “inactivity fee”, which charges customers for holding money in their account for long periods of time without playing.

The fine was then increased by 25% – to €531,250 – because Tipico had not provided proof of its verification measures.

The fine comes as the Netherlands prepares to launch legal online gaming. After a number of delays, the Remote Gambling Act entered into force on 1 April, setting the stage for the market to open six months later, on 1 October.

As the country prepares to open the market, it has taken steps to crack down on unlicensed operators. Earlier this week,  Sander Dekker, Minister of Legal Protection, told the regulator to formulate plans for “intensification of enforcement” against these operators. 

In a written response sent to the House of Representatives, he said that the KSA should no longer tolerate those operators who make their games available to Dutch players even if they do not offer Dutch language sites or domains.

The KSA then outlined a number of new tougher penalties for illegal operators in the market, who may be fined up to 4% of turnover. The KSA will estimate financial positions should figures be unavailable.

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