The Netherlands’ second five-year cycle will test the market’s sustainability

Seeing the Netherlands Gambling Authority (KSA) renew its first batch of licences is an important milestone for the Dutch online gambling market. It’s also a good opportunity for us to reflect on the last five years and try to better understand what might come next.

I think it’s fair to say the honeymoon period is very clearly over.

The next five years will be defined by an expectation that operators understand what is required of them from a regulatory perspective, the broader direction of travel set by the KSA and, crucially, the spirit behind those regulations.

The KSA has made clear licence renewals are not simply a formality. Nor are they a pure administrative process.

Instead, operators must genuinely justify their continued presence in the market. This includes explaining to the KSA any previous mistakes, what has been learned and how the operator intends to ensure those mistakes don’t happen again in the future.

This is increasingly how we are seeing mature licensing regimes work. It’s not enough to simply follow the rules. You need to show you understand why the rules exist in the first place.

There was some concern when the new renewal rules were first announced that any historical enforcement action would essentially preclude an operator from a new licence. Thankfully, we’re seeing something more proportionate than that.

Some of the operators that have received renewals so far have been sanctioned by the KSA in the past. But they’ve clearly shown the regulator they’ve learned from their mistakes.

Prepared for everything

Still, this represents a big change from what has come before. Operators cannot treat an enforcement case in isolation. Paying the fine or making the changes isn’t necessarily enough anymore. This idea of a regulatory track record is going to require a change in approach.

The introduction of mandatory exit plans beyond just the servers is one good example. The KSA wants companies entering this next cycle to think seriously about what happens if things don’t go to plan. This includes how player funds would be protected if they ultimately leave the Dutch market.

We’ve already seen a handful of operators exit the Netherlands over the last few years, and I wouldn’t be surprised to see more follow.

By introducing an exit plan requirement, the regulator is essentially acknowledging that this is a tougher and more competitive market than it was back in 2021. Yes, commercial failure is a possibility, and we need you to be ready to exit responsibly if it happens.

There’s a lot on operators’ plates right now, including tighter player protection requirements, restrictions around advertising, affordability checks and a heavier tax burden. At the same time, they are competing against an offshore market that does not follow those rules.

Don’t get me wrong, there’s still plenty of opportunity in the Netherlands. But it isn’t a market to enter unless you really understand the challenges and requirements.

Every new regulatory requirement carries an operational cost. Compliance teams need more people, technology needs to be adapted, and controls need to be monitored constantly. If revenues are under pressure, there will inevitably be operators asking whether continuing to hold a Dutch licence makes commercial sense.

This is the reality of a maturing market. We shouldn’t automatically view consolidation or voluntary exits as something negative. Instead, I’m encouraged to see the regulator understanding this reality and putting protections in place for players.

Offshore pressure

Then there’s the offshore question. Channelisation is once again a big topic of conversation in the Netherlands, and that is concerning, particularly to those that are playing by the rules.

We’ve seen the KSA issue some huge fines over recent months to offshore operators, although whether they will ever be able to collect those fines is another question. The state lottery has also pursued legal action against offshore operators.

Player protection and channelisation are sometimes presented as competing objectives. But they really shouldn’t be. As we all know, all the protections in the world count for nothing if players are gambling outside of the framework anyway.

This is going to require balance from both operators and the KSA.

Operators cannot respond to commercial pressure by cutting corners. The regulator, equally, needs to remain conscious that every restriction changes the competitive relationship between licensed and unlicensed gambling.

The encouraging part is that the KSA increasingly appears willing to engage with operators while also being very clear about the standards it expects. That relationship will become even more important over the next five years.

If the first licensing cycle was about establishing the Dutch regulated market, this second one will be about proving it can work sustainably.

Mike de Graaff is co-founder and chief compliance officer at BetComply, as well as a leading voice on regulatory issues in the Netherlands and beyond.