Dutch Council of State calls for review of lottery monopoly licensees
Oversight body rules KSA should not have changed licences following privatisation of lottery operators
The Dutch Council of State has ruled that the Dutch gambling regulator did not have the authority to change the designations of licences belonging to two state lottery operators, following privatisation of both businesses.
The two organisations, Lotto and Staatsloterij, were converted from state owned foundations to private companies with new owners in 2016. At this time, the names of both firms changed to include the BV designation and to incorporate this change, the Gambling Authority (KSA) simply amended the existing gaming licences.
The European Betting and Gaming Association (EGBA) and several other operators raised objections to this name change, which were ultimately dismissed by the KSA in two separate judgements in 2017.
At the time, the KSA said the matter was only about changing the names on the licences to reflect the business changes and not a matter for other operators.
However, the EGBA appealed against the decision, which was referred to the Council of State’s Administrative Law Division as Holland’s highest civil court.
Under current Dutch law, a single permit system applies in the Netherlands for organising lottos, sports competitions and instant lotteries with the aim of combatting crime, prevent gambling addiction and protecting consumers.
Although such a system contravenes EU law in respect of the free movement of services, this sort of restriction “must be proportionate to the objectives of the gambling policy”, if it is it can then be deemed as being justified under EU law.
The division, which meets in the Hague, concluded that the KSA should have “assessed whether the change of the registration meets the conditions of European law” but it deemed that no such assessment took place and as such the KSA was not allowed to change the licences.
Because of this, the Administrative Jurisdiction Division must issue a new binding decision on whether the KSA can change the licences for both operators.
The KSA is also obliged to explain why it applies a single-permit system for both the Lotto and the State Lottery, and whether this satisfies the conditions of European law.