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Dutch regulator issues penalties to LCS and Blue High House

| By Robert Fletcher
Dutch gambling regulator Kansspelautoriteit (KSA) has handed penalties to LCS Limited and Blue High House for continuing to offer online gambling in the country despite not holding the relevant licences, though LCS is refuting the matter.
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KSA previously reached out to both LCS and Blue High House about the issue. However, the operators continued to illegally run online games of chance without approval in the country.

As such, KSA has ordered both operators to pay a financial penalty. LCS faces a penalty of €165,000 (£139,066/$177,308) and Blue High House €129,000. KSA added that it could take further action over the matter.

“An order subject to a penalty is more than a warning to an illegal provider,” KSA chairman René Jansen said. “Illegal providers who do not take the right measures to ban Dutch players will be dealt with harshly by the KSA and will feel this where it affects them most – in their wallets.”

KSA references ongoing breaches at LCS

The LCS case dates back to August 2022 when KSA imposed a €165,000 penalty on LCS for offering gambling without a licence. Investigations into the matter began in March of that year.

KSA followed this up with a cease-and-desist order a month later. The operator was found to have offered online games of chance to Dutch players via its Sonsofslots.com website.

LCS hit back at the order, launching legal action in a bid to continuing operating. However, a year later, KSA opted to impose a fine of €2.1m for breaching national laws by offering online games without regulatory approval.

In the days that followed, LCS vowed to “aggressively” appeal against the fine, describing the ruling as “unjustified”. LCS criticised the decision to issue such a large penalty, saying the case relates to a single incident on Sonofslots.com in early 2022. It added that it took immediate action to rectify this. 

As to how KSA reached the €2.1m figure, LCS also criticised this methodology, describing it as “flawed”. LCS says the total is based on estimated figures, which it adds have since been proven to be wrong.

In the latest development that led to the new penalty, KSA said a re-inspection in October 2023 – the same month in which it issued the multi-million-euro fine – found games were being offered illegally via Yugibet.com

This, the KSA said, means that the previously imposed penalty payment is forfeited, even if the violation has now ceased. As such, in addition to the previously imposed fine, the KSA is ordering LCS to pay a further €165,000.

Blue High House could also be fined 

In the case of Blue High House, the operator was issued a cease-and-desist order in October last year, around the same time LCS received its fine. The regulator began its investigation of Blue High House in December 2021.

This charge was due to it offering online gambling without a licence, via Websitebetline.ag. At the time, KSA warned it would issue weekly €43,000 fines up to a maximum amount of €129,000 if the operator did not comply. Blue High House had two weeks from the decision – dated 29 September – to comply with the order. This meant a final deadline of 13 October.

In the latest development, KSA noted that the offence has not stopped, with Dutch players still able to gamble via the website. As such, it is issuing the €129,000 penalty. The KSA added that a fine may also be imposed on Blue High House.

LCS hits back at penalty

Since iGB published the story earlier today, Blenheim, the legal firm representing LCS in the case with the KSA, has responded. 

Speaking through Blenheim, LCS said it wished to make clear it has not re-entered the Dutch market. LCS also called the decision by KSA to issue a penalty as “unjustified”, the same term it used to refer to the October fine.  

It refers to how KSA takes the view that the order for periodic penalty payments imposed on LCS would have been breached, Therefore, periodic penalty payments were forfeited by operation of law.

However, LCS said it cannot agree with this and considers both decisions unjustified. This it says, is due to “various inaccuracies and the unlawful and unauthorised action of the KSA”. As such, it has filed an objection to both decisions.

“Let there be no misunderstanding: we take our obligations under Dutch law seriously,” LCS said. “The recovery decision is unjust in view of the facts. LCS has taken various technical measures to deny or impede access to players from the Netherlands. 

“It is inimitable for KSA to claim LCS has not taken technical measures and has breached the order or has violated any laws or regulations, while the KSA is trying to participate in gambling on the website by using a VPN and false data.”

LCS makes reference to how the KSA previously confirmed it has ceased all operations in the Netherlands and that the charge has been complied with. This, it adds, has been the case since 14 September 2022, when the KSA issued a statement on the matter.

“Unjustified” action

“In this regard, KSA’s own confirmation is self-evident proof of our compliance,” LCS said.

“The recovery of alleged forfeited penalty payments can be seen as more unreasonable. It is a violation of the protection of the legitimate expectations of any reasonable entity. It is paramount to clear up any confusion created by recent media reports. 

“We wish to make it explicitly clear LCS has not re-entered the Dutch market in any capacity. We dispute this unjustified recovery and remain fully committed to compliance and fairness in our operations.”

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