Dutch Regulator’s Licensing Process Questioned

A review of the licensing process used by the Kansspelautoriteit (KSA) (the Dutch regulatory body) has been ordered after a legal battle with the Kindred Group. This evaluation of the process was requested by the Dutch Council of State, which is one of the highest courts in the country and will determine whether licensing in Holland is in line with the law set by the European Union.

A statue of lady justice.

The Dutch Council of State overruled the decision made in the Hague in 2018 and ordered the KSA to review its licensing procedures as well as to pay the legal costs incurred by the Kindred Group. ©AJEL/Pixabay

The matter was originally brought to the court by a subsidiary organization of the Kindred Group, Trannel. This lawsuit was related to the renewal of the totalizator license that is currently held by Zebetting (a subsidiary of Sportech). The Kindred Group took a complaint to court as it believes the renewal process discriminated against other bidders for the license.

The Kindred Group initially planned to throw its hat into the ring to try to be granted the license, but it later withdrew. The operator’s reasoning behind this was that the requests made by the KSA to be considered for the license were not possible for other would-be licensees to do. Kindred argued that this gave Zebetting an unfair edge because it is the only company that has held the license after 1998.

The KSA won a legal dispute with the Kindred Group in the Hague. In May of 2018, the operator lost a challenge because the KSA denied it the right to dispute the issue as it did not hold a valid license in the Netherlands.

The Kindred Group rebutted this decision by saying that it would have continued the application for the totalizator license but the licensing procedure does not comply with EU law so it withdrew. The law set out by the European Union states that all parties should be allowed an equal opportunity to express interest in and apply for licensing in a given country.

The Kindred Group went on to say that one requirement to qualify for the totalizator license is that the operator must own and operate one land-based business in the country. Zebetting indeed owns such businesses, but many others do not. The Kindred Group, therefore, concluded that it was illegally excluded from the bidding process.

The operator also pointed out that Zebetting had argued against Trannel being seen as a competitor in the country because it is not an active part of the market in the Netherlands. For Trannel, the fact that it is active in the totalizer markets in other countries seemed like a fair reason for why it should be considered a competitor in the Netherlands.

In addition to this, the Kindred Group also argued that it had attempted to apply for the license numerous times before in previous years. The operator felt that this repeated interest in a totalizer license in the Netherlands demonstrated a clear and real interest in the market in the country and should, therefore, be taken seriously.

The Dutch Council of State’s Ruling

After hearing the case made by both sides in this dispute, the administrative court ruled in favor of the Kindred Group and Trannel. The court decided that any entity should be allowed the right to protest against the decisions made in the licensing process, regardless of whether they already hold a license in the country or not.

The Council of State also overruled the original decision made in the Hague and, as a result, ordered the KSA to cover the legal costs of the challenge. It also ordered the KSA to undergo a comprehensive review of its licensing procedures to ensure that they comply with the law set by the European Union.

The court’s decision was celebrated by the European Gaming and Betting Association (EGBA). This association released a statement on the matter detailing its belief that the KSA should be complying with European law. The EGBA is now hopeful that the licensing procedure in Holland will become more transparent and fairer as a result of this ruling.

The KSA and other groups in Holland are currently working hard to prepare for the launch of the new, regulated iGaming market in the country but will need to review the licensing procedures simultaneously. Recent estimates suggest that the launch will be delayed further by COVID-19 and will, therefore, not be ready until Autumn of 2021.

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