Why local expertise will be crucial in the Netherlands
Jasper Hoekert from Revenue Engineers on how operators and providers will need to think locally to succeed in the soon-to-be regulated Dutch market
Last week’s news that the lower house of the Dutch parliament had passed the Remote Gaming Bill was a long time coming, and the sighs of relief from stakeholders in the Netherlands were audible.
Although the bill must still be passed by the Senate, this should be a formality, and with a bit of luck we could see an open and regulated gaming market operating by the end of 2017.
While the new legislation is not ideal, I believe it is very workable. As many warned last year, the decision to impose a flat 29% tax on gross gaming revenue across the online and land-based industries could be damaging to the nascent online sector – particularly in terms of channelling players away from unlicensed operators and into the new framework.
The initial proposal of a 20% GGR tax on remote operators would have nurtured stronger growth and ultimately delivered greater tax receipts. But nonetheless there are plenty of reasons to be optimistic that the Netherlands can quickly emerge as one of Europe’s most important gaming markets.
On the tax front, lawmakers have left the door open for a potential reduction to the levy in the coming years as the market liberalises. In the meantime, operators and providers will have a new market of almost 17 million people which ticks a lot of the right boxes when it comes to growing a robust gaming industry.
A strong sporting culture, a land-based gaming heritage and high technology adoption rates should all make the market appealing to operators and providers. However, while the opportunity is clearly exciting, those who enter the market without sufficient local expertise will be in for a shock.
Getting to grips
As we have seen across Europe with the move towards a dot country regulatory model, firms which believe a one-size-fits-all approach will work across the continent generally have their fingers burnt.
Take marketing as one example. Amendments to the bill mean the Netherlands will boast some of the toughest advertising restrictions of any regulated market. No adverts will be permitted on mainstream TV channels between 6am and 9pm, and operators will be prohibited from taking bets on sports teams they sponsor.
There will likely also be restrictions placed on the advertising on in-play odds when the technical details of the new framework are published later this year. The operators which succeed in their marketing will need an in-depth understanding of the Dutch media landscape if they are to make an impact.
Interestingly, Revenue Engineers has been working on a number of joint ventures between international and local firms ahead of this regulation. It is clear that even some of the biggest names in global gaming see huge value in working with a local partner rather than going it alone in the Netherlands.
What makes this expertise so valuable is timing. The rush for market share in the months immediately after the new framework is introduced will likely define the future of the Dutch gaming market. Those who miss out initially will be left with limited options outside of astronomical marketing spends or M&A activity if they want to become a major player. The time to act is now.
It is fantastic news that we are finally on track to regulate online gaming in the Netherlands. The much-needed clarity this bill brings can serve as a spark for innovation for both local and international firms.
How these firms respond to the unique market challenges will determine the success of the new framework. With the right tools at hand, there is no reason the Netherlands shouldn’t be Europe’s newest gaming success story.