The Dutch courts have made a groundbreaking ruling that could potentially reshape the landscape of the online gambling industry. The Overijssel District Court decreed t and Entain, two prominent players in the industry, must reimburse all losses incurred by two of their players during the grey market era.
The lawsuits were brought against Flutter-owned PokerStars and. The crux of their argument was that these companies were operating without a license in the Netherlands’ grey market prior to the regulated market’s inception in April 2021, thereby violating Dutch law.
Interestingly, neither of these subsidiaries are currently active in the market. However, Entain is licensed and operates in the Netherlands through its BetCity brand.
According to reports, the player involved in the Bwin lawsuit is to be repaid €187,622 plus interest. This sum accounts for bets placed between January 2018 and November 2019. In the second case, Flutter is required to repay the customer $230,705 and €400 plus interest for gambling activities conducted between 2006 and 2021.
These cases are not isolated incidents but part of a broader European trend where gambling businesses are being ordered to return player losses for unlicensed betting activities. Lawyers have successfully brought similar cases forward in Germany, Austria, and the Netherlands. While many operators have chosen to comply with the court orders, others, notably 888, have continued to fight.
The Controversial Bill 55
In response to these legal challenges, operators often rely on European free movement of services rules as legal cover for their European grey market operations. Last year, Malta passed a law, commonly referred to as Bill 55, which aimed to shield operators from legal liability resulting from their MGA-licensed activities.
However, Bill 55 has proven to be controversial. Some, including Germany’s gambling regulator the GGL, argue that it is incompatible with European law. In July 2023, the European Commission announced that it would scrutinise the law and requested additional information from the Maltese authorities.
Historically, the Court of Justice of the European Union has been the final authority on disputes between national and supranational law. As such, the outcome of this scrutiny could have far-reaching implications for the future of the online gambling industry.
Khalid Ali, CEO of IBIA said: “The demographics of sports betting is changing and, as an industry, we need to be aware of the opportunities and challenges this presents. The collaboration with the All-in Diversity Project has two main objectives; the first is to promote diversity within the betting industry; the second is to understand how the wealth inequality in women’s sports could lead to integrity concerns. By working together, we hope to tackle these issues through a series of events and studies that we have planned for the next few years”.
“Having the IBIA support the All-in Diversity Project is a huge leap forward for us. Collaborating with standard setting global organisations such as IBIA means we can accelerate progress and engage with a wider audience to address some of the challenges faced by sports and sports betting – from the hidden impact of inequality on integrity, to the more obvious issues related to gender and race within the entire sports and betting ecosystem by sharing data, resources and experience and developing tools that work. We are thrilled to have them as a partner,” says Kelly Kehn, Co-Founder of All-In Diversity Project.
