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Exploring The Status Of Poker In Europe – Holland

October 5, 2008 2008

Although Dutch players are revered on the world poker scene, restrictive legislation in Holland limits opportunities for Dutch nationals to play the game outside of state-owned casinos.

Anyone who knows poker knows that the Dutch make for some of the most formidable players on the planet. Among their number are young tyro Noah Boeken, whose career earnings exceed US$630,000, former athlete Rob Hollink, a father of three with earnings in excess of US$2.2m, as well as one of the Godfathers of European poker, Marcel Luske. Luske, the ever-stylish ‘Flying Dutchman’, has well over US$3m in the bank thanks to poker, and if his trademark habit of wearing his sunglasses upside down seems a little odd at first, it soon becomes familiar and, one might think, evidences a buoyant, confident and well-established Dutch poker market.

Sometimes though, style triumphs over substance. If Luske has an undoubted pedigree in international poker, there are serious questions to be asked of his homeland’s regulatory stance towards the game. The Dutch may have produced world-class poker players but their laws arguably leave a lot to be desired.

“The game in Holland has exploded in popularity,” confirms Justin Franssen, an expert in gaming law with Amsterdam-based law firm Van Mens and Wisselink. “It’s going through the roof, with plenty of exposure on television and the ongoing success of players like Luske, Boeken and Hollink. Home games among friends, whatever the stakes, are fine but otherwise the legal status of poker is arguably contrary to European law.”

Franssen explains that “…according to the Gaming Act of 1964, poker is only legal in casinos.” Moreover, those casinos are established thanks to a state monopoly. “Holland Casino is a 100-percent state-owned foundation which operates 14 casinos in locations in the Netherlands. It was established in 1975 when the government decided to grant just one exclusive gaming license in order that gaming remained honest, reliable and well-controlled.”

Since 1975, Holland Casino has grown and its bricks and mortar incarnation is set to expand yet further, with applications for five additional casinos, so as to provide “nationwide coverage”, currently pending. Further development is expected as Holland Casino has been authorised by recent legislation, in Holland’s Second Chamber, to develop an online gaming presence. This draft law has received serious criticism, according to Franssen, from the First Chamber (which can, on certain rare occasions, veto laws passed in the lower house), with additional criticism, and the implied threat of potential infringement proceedings, also coming from the European Commission.

The present case law means, in effect, that it is illegal for overseas operators to accept bets from Dutch residents and the regulatory emphasis on national exclusivity is not going down well in all quarters. “It is an interesting and delicately poised situation,” says Franssen, himself a former casino dealer, “not least because the 1964 Act came from the pre-internet age and did not anticipate these modern developments. Another difficulty exists when the EU law perspective is considered. Arguably the position occupied by Holland Casino contravenes Articles 43 and 49 of the EC Treaty.”

Article 43 provides for the freedom of establishment within the European community, while Article 49 establishes the freedom to provide cross-border services. Both are designated as “fundamental freedoms” whose existence is crucial to the functioning of the EU Internal Market. Moreover, they are of “direct effect”. This means that Member States are obliged to modify national laws that restrict freedom of establishment, or the freedom to provide services (and which are therefore incompatible with these principles). There is, though, a carve-out. Member States can implement or maintain restrictions on Articles 43 and 49 in specific circumstances, for example when justified by overriding reasons of public policy, public security or public health. Even so, the restrictions have to be “proportionate”.

There is ample case law on Articles 43 and 49, and, insofar as gaming is concerned, the trend has generally been that national courts do not believe that restrictive gaming laws infringe the EC Treaty. However, as the betting and gaming markets continue their worldwide exponential rise, there are signs of increasing disquiet in various territories – Holland among them. Franssen cites a case brought by Compagnie Financière Régionale B.V (CFR BV) against the Ministry of Justice and Ministry of Economic Affairs as an example.

“Judgment by the Administrative Court of Breda, in December 2005, was greeted as a significant victory for those who contend that state gaming monopolies contravene the EC Treaty. The background is that CFR BV applied for a license to operate a casino in the Dutch municipality of Bergen op Zoom. It was rejected, because of the exclusive rights of Holland Casino but CFR BV launched legal proceedings which ultimately give ammunition to those seeking liberalisation of this sector.”

The reason, explains Franssen, is that the court adopted liberalisation-friendly aspects of the well-known Gambelli case on Italian sports betting. While other ECJ jurisprudence had suggested that exclusive rights for gaming were not incompatible with EU law, the Gambelli case stated that “…the restrictions must serve to limit betting activities in a consistent and systematic manner.” The ECJ, in the same case, also held that “…insofar as the authorities of a Member State incite and encourage consumers to participate in lotteries, games of chance and betting to the financial benefit of the public purse, the authorities of that State cannot invoke public order concerns relating to the need to reduce opportunities for betting in order to justify.”

The court in Breda looked at these and other aspects of the Gambelli judgment and found that Dutch policy was at best counterproductive and at worst that its insistence on a restrictive casino monopoly was potentially contrary to Article 49. “The court found that the policy did not comply with the principles of consistency and coherency as set forth in Gambelli,” says Franssen.

Regrettably, for those who would see Holland change its restrictive stance, the Breda decision has since been overturned, though the points it raised seem set for renewed argument, if not in Dutch jurisprudence then elsewhere in EU Member States. Meanwhile UK operators Ladbrokes and Betfair have also drawn a blank in Holland, with their challenge to the monopoly of De Lotto, the state-authorised entity that runs lotteries, sports books and scratch cards, having failed thus far (although the challenge was only made in relation to sports books).

The restrictive zeitgeist is the antithesis of a report published in 2000, entitled ‘New Round, New Chances,’ which proposed that the Dutch market be liberalised with a phased introduction of a totally free market which would be open to any commercial operator able to meet the licensing requirements. As well as the recent overturning of the CFR case, in 2004 the Dutch government officially reaffirmed its commitment to a single gaming entity. The upshot is that Holland Casino continues to hold all the chips.

Despite this, Franssen says that the tide could be turning. “Poker is so popular here and the Dutch people have a tolerant attitude to the game. This may be not be shared by Parliament but the ongoing disputes in other Member States might help to bring about a harmonisation of European law. It’s a difficult one to call but I’m not sure that Holland Casino will still have an online monopoly by 2010.”

If the restrictive legislation covering poker in Holland does indeed have to be redrawn to accommodate the game’s inexorable rise in popularity, then Marcel Luske’s sunglasses may not be the only thing turned upside down on the Dutch poker scene in the coming years.

The author of this article is Alex Wade. This article was published on 11/09/2007 on GamblingCompliance.com (http://www.gamblingcompliance.com)

© Gambling Compliance Ltd 2006


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