The Netherlands KSA imposes a €1 million penalty on lottery groups for violating licensing regulations

Two lottery operators in the Netherlands have been cautioned by the country’s gambling regulator, Kansspelautoriteit (KSA), regarding potential fines of up to €1 million if they persist in providing games that fall outside the scope of their licenses.

Postcode Loterij and VriendenLoterij, two lottery operators in the Netherlands, have received an order from the KSA, which includes periodic penalty payments, due to their unauthorized offering of online games that are not permitted under their lottery licenses.

Although the two operators have expressed their intention to appeal the decision, they have agreed to temporarily discontinue the provision of these games starting from 8 June.

According to the regulator, if the operators resume offering the games, they will be subject to penalty payments of €250,000 per week, with a maximum penalty amounting to €1 million.

The KSA has classified the lottery’s offerings as games of chance

The KSA has determined that titles such as “Deal or no Deal” offered by Postcode Loterij and “FriendsLottery Millionaires” fall under the category of online games of chance, which are not covered by their lottery licenses.

In a statement, the KSA emphasized the distinction between lotteries and riskier games of chance, stating that separate licenses are required for each. It clarified that lotteries cannot be offered online and that selling participation tickets via the internet is the only permissible method. The KSA reiterated its commitment to maintaining the separation between lotteries and online games of chance.

Postcode Loterij and VriendenLoterij have expressed their intention to challenge the decision and have issued a joint statement. They argue that the free lottery games in question are a form of entertainment and align with the safe nature of a non-profit lottery, whose sole purpose is to raise funds for charitable causes. They emphasize that participants do not win anything by playing the games directly, as prizes are awarded only after a draw takes place. According to them, these games meet the requirements of the lottery license.

In a separate development, a report by Dutch Finance Minister Marnix van Rij has indicated that the government is exploring potential new options for Nederlandse Loterij (NLO), including the potential privatization of the state-owned enterprise.