In extension to stringent ads policy, KSA asks operators to stop cashback bonuses
The Kansspelautoriteit (KSA) has asked all licensed operators to cease offering cashback bonuses to players as it violates the gambling law in the Netherlands – specifically those to do with advertising. The Dutch regulator has allowed operators time till December 5, 2022, to conclude any ongoing cashback offers.
It has been a busy last month or so for Dutch operators as the KSA has tightened the regulatory screws. Alexander/Unsplash
Failure to roll back the bonuses, the KSA said, could lead to stern action including the suspension of licenses. This week, several operators received a letter from the KSA stating that offering cashback bonuses is banned in the Netherlands because they constitute a form of advertising that can act like a catalyst, attracting more and more players to participate in online gambling, and putting a hefty chunk of their money at stake.
Bonuses can sometimes be predatory in nature
While bonuses on sportsbooks can appear enticing to new users, seemingly giving away bets for free, there is a financial explanation as to why they exist in the first place – by design, bettors are likely to spend more money on the sportsbook in order to meet a minimum wagering requirement set out by the platform. These minimum requirements can sometimes run into multiple times the bonus amount itself.
While most reputed brands shy away from underhanded tactics like this, there is no real regulation in this phase of the industry. This could be what prompted the KSA to put in the restrictions for operators in the Netherlands – particularly as they try to improve the reputation of the gambling industry in the country, which has not been received overwhelmingly by the public at large since legalization.
KSA putting its foot down
All licensed operators now have the same ultimatum regarding cashback bonus offers. They are all allowed the same period of time with a deadline on December 5. This has caused quite a lot of concern for digital casinos that used the cashback offer as a unique selling proposition to their players.
From one lens of the betting world, the cashback bonus can be seen as a crutch for players as they stand a chance to earn a part of their lost money back, cushioning the blow of a heavy loss. However, the KSA stands firm on its decision and wants operators to abide by the Betting and Gaming Act, Article 4a, paragraph 2, which states that license holders must “conduct recruitment and advertising activities in a careful and balanced manner”. The KSA issued the following statement to drive home the point:
“With cashback bonuses, players get back part of their losses. This contributes to taking more risks and lowers the threshold to gamble. For example, by playing with higher bets or by playing more often. Bonuses are classified as advertising activity. According to the law, advertisements may not encourage immoderate gaming behavior. In the opinion of the KSA, this is the case with cashback bonuses. If online providers do not immediately stop providing cashback bonuses, they risk enforcement action by the KSA.”
November was a busy month for operators in the Netherlands, as the KSA recognized the FIFA World Cup as an event that could drive massive user participation in the betting scene. A number of regulations were either put in place or reiterated during the course of the month, and in more than a handful of cases, there were penalties for operators. In a fairly new regulated market, it remains to be seen how long operators will toe the line – a lot of the things the KSA is trying to clamp down is what would be considered regular order of business in the gambling scene anywhere else.
