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Are gaming agreements valid that were established in violation of the Gaming Act?

  • Writer: Etienne van Namen
    Etienne van Namen
  • Jan 14
  • 4 min read

Updated: Jan 16

The Supreme Court had to be involved to answer this question, according to recent case law.


Prejudicial questions on validity of gaming agreements

In the Netherlands, gambling is prohibited unless a license has been granted. So, simply put, the Dutch legislation is prohibition legislation. For online games of chance, it was not possible to apply for a license for online games of chance until April 1, 2021.


However, Dutch consumers have known for years (even before there was a licensed offer in the Netherlands) to find their way to foreign licensed offers. Partly due to the need for games of chance (including online), the Games of Chance Act was amended, after which it became possible to apply for a license in the Netherlands. In that sense, it was socially widely accepted that it was possible to participate in online games of chance, in which the lack of a Dutch license did not make any difference to the providers. Although strictly speaking the law was broken because of the offer and conclusion of gambling agreements with unlicensed providers, the question is what civil-law consequences this has for the gambling agreement itself and whether this should lead to civil-law nullity.

 

Recent developments

There have been three recent rulings in this area, where two courts from the eastern part of the country (Overijssel [1] and Groningen [2]) have ruled that a violation of Article 1 of the Gaming Act results in the nullity of the civil agreement.

 

Shortly thereafter followed the ruling of the Zeeland West Brabant District Court, which correctly ruled that violation of the Games of Chance Act does not result in nullity of the gaming agreement. In short, the Breda court ruled that insofar as article 1 paragraph 1 under a of the Betting and Gaming Act had the purport to affect the validity of legal acts between consumers and the gambling provider, this purport has now been lost.

 

On the one hand, because the Act dates back to 1964 and thus the law did not provide for the possibility of a license for online offerings of games of chance and, on the other hand, because the Dutch government did not enforce in a consistent and unambiguous manner. In addition, no action was taken against providers who met the so-called enforcement criteria. Finally, the Dutch parliament passed the bill on remote gambling that provided for this change and thus would allow the offer. Thus, this amendment met a practical need that had existed in Dutch society for quite some time.

 

Conflicting case law

Thus, the rulings of the various courts, although virtually the same legal arguments were made there, lead to different legal outcomes. In other words, the judiciary is limping on two ideas. Several cases are currently pending before the Dutch courts. In a preliminary judgment, the Amsterdam court [3] and the district court of Noord-Holland [4] also that there are void agreements, yet they too have doubts and are putting questions to the Supreme Court.


This is possible through preliminary questions. Once the Supreme Court has answered these legal questions, clarity will emerge as to how to deal under civil law with gaming agreements that have been concluded in violation of the law. This will therefore lead to more uniform case law on this point which, in our view, is desirable for both the provider and the consumer, so that they actually know where they stand.

 

Prejudicial questions:

The questions before the Supreme Court are as follows:

  1. Did the Wok originally intend to affect the validity of legal acts contrary to it?

  2. If so, has that thrust - after initially being present - been lost under the influence of societal developments and/or given the enforcement policy of the Gambling Authority?

  3. Is a gaming agreement between a consumer residing in the Netherlands and an Internet gaming provider that does not have a license within the meaning of the Wok a void agreement within the meaning of Section 3:40 of the Dutch Civil Code?

  4. In answering Question 3, does it matter whether the gaming provider (or an affiliated entity) met the gaming authority's prioritization criteria?

  5. If the answer to question 3 is in the affirmative, what are the legal consequences? Is a claim for reimbursement of the loss suffered on the grounds of undue payment admissible?


Impact

The consequences of such a nullity are enormous and also create collateral side effects. In effect, it could mean that consumers who enter into a gaming agreement with an unlicensed provider could play without risk.

Indeed, should they lose, they can enforce the nullity of the agreement and recover their losses. This could have the effect that players actually enter into gaming agreements with unlicensed providers. Thus, such a civil law qualification could actually harm the objectives of the Games of Chance Act (canalization, consumer protection and crime prevention). Especially now that the battle between legal and illegal gambling offers has flared up more fiercely than ever.

 

If you have questions or would like support, following the above article, please contact contact us. Our firm supports various gaming companies (both land-based and online) in handling player claims. In doing so, we also advise on strategic choices you need to make as an entrepreneur.


 

 
 
 
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