Sander Dekker, the Dutch Minister for Legal Protection, is to develop a framework to future-proof Holland’s lottery industry, following the publication of a fresh report on the sector by PricewaterhouseCoopers (PwC).
Dekker said he intends to set up the framework to the Dutch parliament during Q1. 2021, ahead of the Netherlands opening its regulated online gambling market later next year, but later than initially planned. This would be informed by the PwC report, commissioned by the state in 2019.
It was commissioned so as to ascertain what, if any, changes were necessary to ensure the Dutch lottery sector continues to thrive when the Remote Gambling Act is implemented. This is set to be enforced beginning January 2021, with the market opening to private firms from July.
That will additionally see the government-run Staatsloterij and Lotto, as well as charitable lotteries, compete alongside online casino and sportsbook products for the first time. Without these new offerings, there is little competition between the different lottery products, according to PwC. This would increase, it said, once there’s a greater range of legal products available to consumers.
PwC added that an increase in competition would be good for firms, saying it would encourage them to seek greater efficiency and innovation, which could in turn imply greater payout percentages and larger product varieties.
“After all, increased competition can mean that providers want to distinguish themselves from each other in order to gain market share,” it stated. “As long as there are limited social risks, and / or they can be properly mitigated, market growth and more advertising are not necessarily problematic.”
When it comes to protecting consumers from gambling-related problems in the wide lottery market, PwC said risks associated with lotteries are less than other forms of gambling, and that such risks are not that much different from lottery products.
Moreover, lotteries are rarely feasible for money laundering, it added, with existing the regulations set in place by Dutch regulator Kansspelautoriteit (KSA) expected be effective, even in an expanded sector.
Existing regulations for transparency and advertising are expected to remain effective in terms of protecting the consumer from harm, PwC explained, highlighting that it would be hard for an unlicensed firm to advertise without attracting the KSA’s attention.
But, PwC cautioned charities that benefit from contributions from lottery games could be in for difficult times if an effective system was not put in place. It also suggested that one whereby licensed firms would make mandatory contributions to charities would be the most effective means of ensuring ongoing support.
“In order to ensure a socially desirable level of social contributions to charities, a minimum contribution percentage can be introduced; that minimum percentage then applies to all lotteries,” PwC explained. “What is a desirable amount for such a percentage is a political choice.”
Dekker has promised to cooperate with the Secretary of State for Finance to establish a framework based on PwC’s research by Q1. 2021 at the latest.