Mansion and Co-Gaming Set To Exit Dutch Market

Mansion and Co-Gaming Set To Exit Dutch Market

In a Sept. 26 judgment, the Dutch Council of State rejected the appeal of Mansion and Co-Gaming in a case that was brought against them by the gambling regulator of the Netherlands, Kansspelautoriteit (KSA). Mansion, which operates as well as an online casino branded with its own name, will have to pay a penalty of €150,000, while Co-Gaming, owner of the internet casino, was fined €180,000. Both companies were found to be transacting in the country without a valid gambling license.

Dutch Departure Imminent

In the wake of losing the judgment, Mansion immediately stopped accepting new customers from the Netherlands. Existing Dutch users were able to continue enjoying the casino until Oct. 3, at which time their playing privileges were suspended. They can now engage in no more gaming activity and can only withdraw their account balances. On Oct. 10, Dutch Mansion accounts will be closed completely.

Co-Gaming hasn’t made many public noises about its intentions in the Dutch market, but the Netherlands is now listed as a prohibited country in the terms and conditions.

Dutch Gaming Law

Gambling laws in the Netherlands are a confusing mix of statutes that were passed over a period of decades, and many of them are silent on the topic of online betting, perhaps because they were drafted before the creation of the internet. The government insists that all online gambling sites that accept Dutch players, apart from the locally licensed state-owned monopoly Toto, are acting in violation of the law.

The KSA has a checkered record in court cases with some decisions going its way and others exonerating the gaming outfits that have attracted the attention of its watchful eye. Perhaps in order to improve its win rate, this governing body implemented some time ago a set of “prioritization criteria.” This means that it won’t try to go after all the offshore gambling websites that accept Dutch customers – of which there are certainly hundreds and maybe thousands. Instead, the KSA focuses its energies on operators that specifically target Dutch citizens.

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Legal History

In 2013, Mansion was found to be hosting Dutch-language web pages, and it was also accepting deposits via the Netherlands-based iDEAL payments service. The next year, ComeOn Casino was caught in the crosshairs of the KSA because it maintained pages in the Dutch language, offered live chat support in Dutch and made liberal use of the flag of the Netherlands in its marketing materials.

All of these elements combined to paint a picture of enterprises that were not merely serving Dutch players incidentally or by accident but rather as part of a deliberate marketing strategy tailored to the Netherlands specifically. They thus incurred the disapproval of the KSA. Mansion was fined €150,000 while Co-Gaming had to hand over €180,000.

Mansion and Co-Gaming didn’t take this lying down. They felt that Dutch gaming law as it was being applied was against the provisions of European Union rules because there’s no framework in place for licensing international gambling providers. Meanwhile, local organizations are allowed to solicit licenses and thus have an unfair competitive advantage.

Mansion and Co-Gaming first disputed their fines within the superstructure of the KSA’s own internal appeals processes. When this failed, they took the matter to court, but the betting companies lost their case in July 2017. Now that the Council of State has upheld the lower court’s ruling, all available avenues for challenging the decision are exhausted, and the two gambling corporations have no further legal recourse.

KSA Has Been Busy Lately

The Dutch gaming regulators aren’t content to see how past enforcement actions play out before embarking on new crackdowns. Instead, they have been busy issuing fines to other international gaming houses even while the results of the Mansion and Co-Gaming cases were still pending.

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Recently, Corona Ltd., a subsidiary of Betsson, was handed a €300,000 fine, and Mr. Green was ordered to pay €312,500. Back in July, Bet-at-home was fined €410,000. The KSA is even expanding its remit beyond traditional forms of gambling. It’s now going after loot boxes in video games, contending that they break Dutch anti-gambling laws.

Dutch Regulated Online Gambling to Appear Soon

The vicissitudes of parliamentary politics may be behind the KSA’s stepped-up efforts against foreign casino websites in the past few months. For several years now, the Netherlands has been looking to rationalize its gambling economy with a series of reforms contained in a legislative bill, much as Sweden did earlier this year, but progress on getting the bill passed has stalled. However, experts feel that it has a realistic chance of becoming law by 2020.

It’s not uncommon for the authorities to try to clear the way for licensed gambling by first removing all businesses that are operating illegally. This is just what happened in Colombia in 2017 before it began issuing online gaming licenses. Thus, the KSA’s activities can be seen as a precursor to setting up a regulated internet betting economy.

Mansion and Co-Gaming Being Cautious

Even after having lost court cases, some companies have continued to accept Dutch customers notwithstanding the protestations of the Netherlands government. Thus, it may seem that Mansion and Co-Gaming are being quite accommodating by ceasing their business in the country.

It may be the case that they’re worried about “bad actor” clauses in any forthcoming licensing rules, which would prohibit organizations from receiving the stamp of approval if they have flagrantly broken the law in the past. The fact that they had appeals to work through before a final judgment was reached is a plausible justification for why these two gaming groups continued to accept action from Dutch residents. Now that they’ve lost their final appeal, this reasoning no longer holds true.

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Therefore, we can view Mansion’s and Co-Gaming’s strategy as being the result of a long-term cost-benefit analysis. Simply put, they’re willing to forgo capitalizing on an immediate revenue stream in the hopes that their eventual profits from fully legal operations will be an order of magnitude greater.