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New GDPR legislation will change the gambling scene in the Netherlands

May 25th, 2018 is a day that will go down in history. It’s not the rapture, nor the start of WWIII. But for the European Union, and for the Netherlands in particular, nothing after that will ever be quite the same again.

Because that day marks the initiation of the EU’s General Data Protection Regulation (GDPR), the first new overhaul of the regulations in twenty years. And those regulations are needed now more than ever. According to research from PriceWaterhouseCoopers, 45 percent of financial institutions suffered from economic crime in 2014, 40 percent of which was from cybercrime. Infamous personal information breaches and abuses associated with Wells Fargo, Facebook, and Equifax, have made the regulation act more than timely, but crucial.

What is the GDPR?

The regulations follow the same course as the Data Protection Act of 1998. Not only does it institute hefty fines for failure to adhere to regulations or for information breeches (among other various stipulations) it extends the regulations equilaterally across the Union. The rules also apply to non-EU countries which handle information about EU citizens or businesses.

While it may not seem like the Shot Heard ‘Round the World, it means billions of eurodollars in the balance in prosecutorial savings alone, and regulations that could threaten some of the EU’s leading industries.

What does the GDPR mean for gambling?

Gambling has long been and remains one of the most regulated industries in modern history. It has also been an industry plagued by resistance to such regulations. Much of the online gambling industry has been unfairly maligned by regulatory agencies like the Information Commissioners Office (ICO). In fact, the most popular online casinos in the Netherlands already comply with the same standards. True, it is among the three most-complained about sectors and is the frequent target of accident claims for spam SMS marketing. But that is most often traced back to marketing affiliates, not operators. The sad fact of the industry, however, is that operators are held liable. And in the case, liability can reach into the billions. Fines are up to €20,000,000 or 4% of annual worldwide turnover (whichever is the greater).

And the ICO has enlisted the Gambling Commission to help enforce the regulations and levy fines, and GC has been writing letters of compliance as a first wave in the enforcement campaign.

Why all the focus on online gambling? It’s the fastest-growing part of the worldwide gaming industry. In 2012, the UK online gambling market had reached roughly £2.28 billion, a £1 billion increase, almost half, of just four years before. Mobile gaming was up 75 percent year over year and estimated for 25 percent of all gambling-related searches.

There are three areas where the online gambling industry is most susceptible to these fines: The basic principles of processing, compliance with the new and enhanced rights granted to individuals, and stringent consent requirements. If any online casino or other gambling sites can keep these areas air-tight, they should be in an excellent position to go on doing business in the EU and to benefit from the extraordinary possibilities opening up for online gambling in the Netherlands.

But for those who are in need of catching up with the new regulations, it won’t be as easy as it sounds. There will be changes across the board in almost every department of any business: IT, budget, legal, communication, personnel. Affiliate arrangements and other contracts will have to be reconsidered and in some cases renegotiated, if possible. Companies who use cloud storage services will have other technical considerations.

Gambling in the Netherlands

Unlike Belgium, the Dutch government has long kept gambling a domestic practice. Casino gambling is strictly practiced under the auspices of Holland Casino, and the government (so far) allows only Dutch-run gambling sites to be hosted in the Netherlands. Despite their best efforts over 400 online betting sites still, accept bets from Dutch residents. And the Dutch government’s stances are changing every day: Foreign competitors are expected to be granted licenses. The tax rate is expected to drop from 29% to 20% on profits from legal online gambling. A national register of gambling violators, play time limits, and other safeguards are also being considered to temper the possible effects of addiction. Internet gaming operators may have to maintain a physical presence in the Netherlands, though a simple empty office may suffice.

Whatever the future holds, it seems clear that gambling will continue to be a part of life in the Netherlands. It also seems clear that online gambling, that industry’s wave of the future, is hitting her shores hard. Whether savvy industry leaders will be able to capitalize on this burgeoning market and to abide by its new and more strictly enforced regulations, remains to be seen. But after that singular date, May 25, 2018, the Netherlands and the rest of the EU, in fact, the entire world, will begin to find out. And that makes it a date to remember.

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