Kindred Group wins Dutch court appeal over tote licensing favouritism claims

Kindred Group has won an appeal against the Dutch Gambling Authority (KSA) over favouritism shown to ZEbetting & Gaming BV in its tote licensing application.

The ruling relates to Kindred’s Trannel International Subsidiary and its own application for the tote licence, which was withdrawn after Kindred concluded that the licence was to be awarded to the incumbent licensee.

In November 2016, the KSA began a “transparent award procedure” for a five-year tote licence, allowing other operators to compete alongside the incumbent licensee.

On this basis Trannel submitted but later withdrew its application after the tote licence was awarded to ZEbetting & Gaming BV (then known as Sportech Racing BV) in June 2017.

Kindred Group filed a complaint with the KSA over the granting of the licence, a complaint which the KSA later declared to be “inadmissible” given the fact that Kindred had withdrawn from the licensing process.

The Stockholm-listed operator filed a legal challenge against this decision.

In April 2019, a judge in the Hague District Court sided with the KSA, contending that Kindred Group was not an “interested party” or competing party for the licence as the company had withdrawn.

Kindred later filed an appeal against this court ruling, arguing that its lack of participation did not mean that it was not an interested party. The operator questioned whether the licensing procedure met the requirements of European Union law.

Qualifying this stance, Kindred cited one of the conditions of the licensing process: any interested party must have “demonstrable experience” in organising tote betting in a physical (offline) offering within the Netherlands, the EU or the EEA.

However, in practice, only ZEbetting met that condition.

ZEbetting, the other named party in the case, claimed Kindred was not a competitor because it is not active in the market segment for which the contested license was granted.

However, judges in the Dutch Council of State’s administrative division ruled in favour of Kindred Group, claiming that rival firms were not able to compete properly for the licence due to the conditions imposed by the KSA.

In addition, the council said Kindred was an interested party, having repeatedly expressed an interest in the licence and submitting applications over a period of several years.

Quashing the prior court ruling, the council ordered the KSA to repay all Kindred Group’s costs. The KSA has also been ordered to conduct a secondary review of Kindred’s prior objections to awarding of the licence, potentially opening the door for the decision to be overturned.

Kindred Group did not choose to comment directly on the matter when approached by EGR, but referred to comments made by the European Betting and Gaming Association about the ruling.

Kindred operates as full member of the pan-european trade body, whose chair Maarten Haijer welcomed the ruling.

“We welcome the ruling by the Dutch highest court, which ensures that the KSA will need to verify whether its existing procedures for licensing allocation comply with EU law,” said Haijer.

“These are basic requirements of the European legal order which the Council of State reconfirms in its ruling. We are looking forward to the assessment of the KSA regarding the transparency and fairness of its current licensing procedure,” Haijer added.