This week, Kansspelautoriteit (KSA) issued significant sanctions to Novatech. In fact, it was the largest penalty ever given by the Dutch regulator to an offshore operator, totalling to €24.9m.
Having previously held a license in Curacao, the operator has since dissolved its registration on the Curaçao Chamber of Commerce since the fine was issued.
The significant size of the sanction underpins just how elevated the company’s platform was in the Netherlands, underlining the size of the black market threat amidst tight frameworks on the regulated landscape.
Upon issuing the sanction, Michel Groothuizen, KSA Chair, stated: “We determine the amount of the fine based on the (estimated) turnover that the illegal provider has achieved from players from the Netherlands.
“In doing so, we are limited by the law that says the fine may be a maximum of 10% of global turnover. Novatech earned hundreds of millions from its illegal offer, and did so mainly from Dutch players.
“A fine of €24m sounds impressive, but without the maximum of 10%, the fine would have come to more than €100m; an amount that would be better suited to this violation.”
It appears that Novatech voluntarily dissolved its Curacao license to avoid the sanction issued by the Dutch authority, a move that really raises significant questions about the effectiveness of enforcement and how companies can be tackled.
Upon the fine being issued, many had raised doubts about whether it could be implemented. However, forcing the firm into a position where it felt it necessary to surrender its Curacao license is certainly somewhat impactful.
Whilst there will likely be another market that is willing to embrace Novatech, the actions of the KSA appear to have been worthwhile and have had an impact on the company’s roadmap.
Momentum behind the KSA sanctions was also compounded by actions of the Swedish Gambling Authority, Spelinspektionen, which also hit out at the operator.
Spelinspektionen commenced its case against Novatech over allegations of supplying unlicensed games to players through a myriad of websites, citing player protection concerns as the main reason behind its decision.
Wider regulatory action
The Court of Justice of the European Union (CJEU) outlined that it believes insolvency proceedings should be enabled for EU states to freeze the bank accounts of non-European licensed online gambling operators.
This would elevate the action of regulators when it comes to being able to legitimately tackle offshore operators.
It is a decision that came after a claim brought by a German player seeking to recover approximately €57,000 in online gambling losses from an operator incorporated in Curaçao. After obtaining a default judgment in Germany, the claimant applied to freeze bank accounts believed to belong to the operator in the member state of Cyprus using the European Account Preservation Orders (EAPO).
This case threatens to provide an evolution of how regulators deal with offshore operators.
