Court ruling could end Dutch lottery monopoly

A court has ruled that the Dutch lottery monopoly is unjustified.

The Netherlands.- Nederlandse Loterij’s monopoly on lottery gambling in the Netherlands has been called into question by a court ruling. The East Brabant District Court deemed the continued lottery monopoly after the opening of the regulated online gambling marketplace in 2021 to be “inconsistent”.

A gambling operator had taken the matter to court after having its application for a lottery licence rejected by the Dutch gambling regulator KSA in September of 2022. The East Brabant District Court’s ruling doesn’t name the business involved, but Dutch media have reported it to be JVH Gaming, which operates Jack’s Casino and Jacks.nl.

The court agreed with the operator that the continuation of a monopoly for lottery under the Netherlands’ Remote Gambling Act (KOA) breaches Article 56 of the Treaty on the Functioning of the European Union (TFEU), which bans restrictions on offering services in EU member states. It also agreed that a monopoly system for lottery was not necessary for customer protection given that lottery is considered safer than online casino gambling and sports betting.

The court stated: “The court notes the current gambling policy, after the entry into force of the KOA, has a single licence system for land-based games of chance with a smaller risk of addiction and a smaller chance of criminal activities.

“While the current system for online gambling with a greater risk of addiction and a greater chance of criminal activities has an open licensing system. In the court’s opinion, this inconsistency, viewed in the light of the legal developments in connection with the entry into force of the KOA and in the light of the actual effects of that entry into force, makes Dutch gambling policy no longer horizontally consistent.”

As a result, the court found that the KSA did not have the right to deny lottery licence applications on the grounds that Nederlandse Loterij had already been approved to operate lotteries. The regulator has been given 12 weeks to reassess the operator’s applications. Nederlandse Loterij has monopoly licences in three segments: Krasloten, Toto and Lotto.

In November, the  European Gaming and Betting Association (EGBA) won its appeal against the European Commission (EC) regarding its call for an investigation of how the Netherlands awards lottery licences. The EGBA had taken the case to the Court of Justice of the European Union (CJEU) after the EC rejected calls for an investigation in 2020.

The industry group initially made a complaint in 2016, arguing that the Netherlands was granting its incumbent lottery operators illegal financial advantages. However, the EC ruled that a probe was unnecessary because the Dutch licensing process did not constitute illegal state aid.