Yesterday (12 October), KSA issued LCS with a fine of €2.1m (£1.8m/$2.2m) for unlicensed activities in the Netherlands. KSA is accusing MGA-licensed LCS of offering gambling via its Sonofslots.com site without the relevant Dutch approvals.
The ruling comes after a year of legal wrangling. The initial penalty decision dates back to August 2022 when KSA imposed a €165,000 penalty on LCS. KSA also ordered the operator to cease and desist from offering unlicensed gambling
The Dutch Betting and Gaming Act (WOK) mandates all operators must be locally licensed to legally offer gaming services in the country.
KSA first launched its investigation of LCS in March 2022.
LCS blasts “excessively punitive” fine
In response, LCS has now hit back in the case, criticising the KSA’s decision to issue such a large penalty. In a statement issued to iGB by LCS-appointed lawyer Blenheim Advocaten, the operator says it will appeal the decision.
LCS says the case is in relation to a single incident on Sonofslots.com in early 2022 and that it took immediate action to rectify this. As such, it describes the €2.1m penalty as “undeniably, excessively punitive” by KSA.
“Let us be unequivocally clear: we take our obligations under Dutch law seriously,” LCS said. “The fine is not only excessive but also unjust, considering the facts. It’s important to clarify that this fine pertains to an accidental, single instance of violation that occurred in early 2022.
“We took immediate, decisive action to rectify the situation, effectively preventing Dutch customers from registering on our platforms. Our proactive measures successfully prevented Dutch customers from registering on our websites.”
LCS also references the KSA’s own acknowledgment that it has been inactive in the country since September 2022. This, it adds, is evidence of its compliance with regulations in the Netherlands.
“The imposition of the fine can be seen as even more unreasonable and as violating the protection of the legitimate expectation of any reasonable entity,” LCS said. “This is because the fine should be qualified as a punitive sanction, while a sanction of a punitive nature has already been imposed earlier, namely the order subject to penalty.”
“Flawed” calculation method to reach penalty amount
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.
As such, LCS says it will be “aggressively pursuing” an appeal against the decision. LCS also claimed that recent media reports suggesting it has re-entered the Netherlands are incorrect.
“We are aggressively pursuing an appeal to challenge this unjust decision,” LCS says. “The fine, which we reiterate is based on a single, past violation, does not align with our current operations, which have consistently adhered to Dutch regulations.
“It is of utmost importance to dispel any confusion created by recent media reports. We want to make it explicitly clear LCS has not re-entered the Dutch market in any capacity.
“We categorically dispute this unwarranted fine and remain unyielding in our commitment to upholding compliance and fairness in our operations.”
Lawyer Blenheim Advocaten adds that it is confident the KSA ruling will not stand.