There are six organisations that are licensed to offer lottery games. The Stichting Exploitatie Nederlandse Staatsloterij, founded in 1726, is the oldest continuous lottery in the world, though it is now operated under new legislation passed in 1992. This state lottery offers a traditional number lottery, which has monthly draws and an additional one on New Year’s Eve, a jackpot game and a weekly game (Dayzers). It has a network of approximately 3,500 retail outlets that has had an online network since the latter part of 2000.
The Staatsloterij is licensed by the Department of Justice, with all surplus revenues being directed to the Exchequer. During 2003 the Staatsloterij’s draws accounted for 47.0% of the Dutch lottery market, making it by far the most popular lottery, with sales of €699.1 million. Of the other Dutch lotteries, the Bank Giro Loterij had sales of €79.8 million in 2003, the Nationale Postcode Loterij had sales of €362.1 million, the Nederlands Sponsor Loterij had sales of €69.6 million, and De Lotto, which offers lotto, sports betting and instants, had sales of € 276.2 million, which is up 10.4% from the previous year.
The lotteries in Netherlands do not pay VAT on their services.
The Lotto has been established to generate funding for sport and culture. The Lotto’s net revenue is divided with 70% going to sport activities through Netherlands Olympic Committee*Netherlands Sport Federation (NOC*NFS) and 30% going to charities in the field of culture, social welfare and national health. Altogether there are more than 500 beneficiaries from all the lotteries operating in Holland.
As early as from the 19th century, Dutch legislation states that games of chance can be permitted only if the proceeds contribute to a good cause. This derives from the (religious) convicting that gambling is improper. Financing good causes is considered to be a private enterprise. As a result of that, the Dutch good causes, including the sports sector, have been reliant on the contribution by licensees of games of chance for decades. With the growth of the games of chance in this period, the importance of these contributions has grown as well.
Whereas funding of good causes isn’t an aim of the Dutch policy on games of chance (the aims are regulating and controlling games of chance, thus preventing problem gambling, protecting consumers and preventing criminality and illegality), the good causes are dependent on these contributions from way back. To them it is vital to maintain this obligation.
The mandatory payments can be divided into two categories: payments to charity (good causes) and to the Treasury. Only the net profit of the two government owned organisations (Staatsloterij and Holland Casino) is paid to the Treasury (Ministry of Finance). The rest of the operators of charitable lotteries do not have mandatory contributions to the Treasury (except taxes); instead most of them are obliged by law to give a certain percentage to charitable organisations. The percentage of the sales of charitable lotteries that has to be contributed to charity was reduced from 60% to 50% as at the 1st of September 2004.
The mandatory payments are as follows:
Staatsloterij: mandatory payment to the Ministry of Finance at least 15% of turnover. The Staatsloterij is obliged by law to use 60% of the proceeds of lottery ticket sales as prize money. Instantloterij: no percentage mentioned, net profit is given to charity.
BankGiro Loterij: Obliged by the license to give 50% of proceeds of lottery ticket sales to charity.
Sponsor Loterij: Obliged by the license to give 50% of proceeds of lottery ticket sales to charity.
Postcode Loterij: Obliged by the license to give 50% of proceeds of lottery ticket sales to charity.
‘Incidental lotteries’: The license holders for incidental lotteries are obliged to give 50% of turnover to charity.
Lottery funding is extremely important for sports in the Netherlands. It is the main source of income for national sport structures (Netherlands Olympic Committee*Netherlands Sport Federation – NOC*NSF and sport federations), which include almost 30,000 sport clubs at local level and facilitate 4.7 million participants, which equated to 30% of total population.
Sport activities were expected to receive €45 million from Lotto in 2005. Lottery funding became especially important to sport organisations, since the state government decreased its financial support since 2004 onwards and now amounts to €62 million in 2005. Lottery funding thus constitutes to 38% of total income for sport organisations.
There are also 75 licenses issued each year by the Ministry of Justice, if prize money exceeds €4,500 or by the town Mayor, if prize money is under €4,500, to mainly non-for-profit organisations to hold occasional lotteries. These licenses are for a short period (from 1
January 2006 max 6 months) only and are mainly aimed to generate funding for charitable purposes.
Lottery operators do not pay VAT, but pay 25% tax on winnings above €454. Some of the lottery operators pay license fees, while others do not. It is expected to change in the near future:
The Instantloterij is organised by the Lotto (sporttotalisator) therefore there are no separate employment figures available. The Postcode Loterij (NPL) joined with the Sponsor Loterij in 2000, in 2003 the BankGiro Loterij joined the Postcode Loterij. It is not possible to make any predictions about the employment in each of the sectors for the next five years. Incidental lotteries are mostly organized by volunteers of the association.
There are no charitable lotteries in other member states in Europe as can be found in the Netherlands, according to Dutch Charitable Lotteries Association. Even though they are similar to the UK and Swedish lotteries, there are some differences. For example although the charitable lotteries are national lotteries there is no political interference in the distribution of the revenues and the revenues are unearmarked. Also the percentage of the revenues from sales of tickets to the charitable lotteries that must be contributed to charitable causes is 50%.
The Dutch Postcode Lottery was founded in 1989 to raise funds for charities. In 2006, this lottery supported 52 charities in the area of development cooperation, nature and the environment and human rights, e.g. UNHCR, the Dutch Red Cross, Clinton Foundation and Unicef. In 1998 the Sponsor Lottery was created and in 2003 – the BankGiro Lottery. The three charitable lotteries are separate entities which have there own license and they all are operated by Novamedia. The Sponsor Lottery supports charities on sports and welfare, the BankGiro Lottery charities on culture. In 2005 the Dutch Postcode Lottery had an income of 420 million euro of which 212 million euro was given to charity, the three charitable lotteries gave in 2005 a total of 300 million euro to charity. The Lotto for example gave an amount of 65 million euro.
Since 1976, Holland Casino has been licensed to operate casinos in the Netherlands. It opened its first property in Zandvoort in October 1976. There is one operator (Holland Casino’s or HC), which is licenced to operate 14 casinos, up from 11 in 2000 to 12 in 2002.
In March 2006 the casino in Venlo opened and the casino in Leeuwarden is expected to opening December 2006. In 2004, Holland Casino’s experienced a decrease in total gross gaming revenue.
Holland Casino’s is subject to supervision from the Ministers of Justice, but operates independently. It has one license that covers up to a maximum of a dozen casinos, with the consent of the appropriate city councils. The license will remain in force until such time that the Government decides to revoke it. (Source: GBGC Report)
Holland Casino’s pay gambling specific taxes, which is 33 1/3% of the gross revenue (turnover minus prize money) generated by table games. Holland Casino’s is also obliged to pay the standard 19% VAT over other sources (for example machine games) of income than table games. In 2004 this came to € 52.2 million.
Holland Casino’s is the only operator of casinos. The net profit of Holland Casino’s is paid to the Ministry of Finance.
Machine Gambling Outside Casinos
Gaming machines outside of casinos in the Netherlands may be operated by amusement arcades and high barrier locations as bars. There are approximately 300 slot machine operators in the Netherlands. About 80% of these operators are in the hotel and catering sector, 16% are amusement arcades, and the remainder are active across both sectors.
In the hotel and catering sector there are about 250 operators of slot machines with 135 of these having five or fewer locations. Of the remainder, 105 have between six and 50 locations with about ten operating over 50 locations. The biggest operator has about 4,000 sites. The GGR generated by slot machines is traditionally split equally between the operator and the proprietor of the hotel and catering sector location. However, over the past few years the split has moved towards 60/40 in favour of the property proprietors.
About 60 operators have slot machines in amusements arcades, with about 28 of these being single site operators. A further 20 have between two and five. The largest operator has approximately 34 arcades. (Source: GBGC Report)
However, according to the Netherlands Gaming Control Board, the above figures on the gambling machines market in the Netherlands, which are based on figures from the Dutch machines trade association, neither include the site owners share in the revenues, nor the VAT component. These figures only reflect the machines owners’ profit, and not GGR, as defined in the study.
The gaming machine operators do not pay any gambling specific taxes. They however, pay standard 19% VAT, irrespective of their location. The VAT collected from machine gambling is unknown since it is not separated from that collected from other sources. There are no mandatory payments to charity or central government. However entrepreneurs are liable for corporation tax.
There are three types of licenses: A license issued by central government for the machine gambling operator (the so-called operation license), a license for the manager of the catering sector location (cafés, restaurants) to have a maximum of two gaming machines present (the so-called premises license), and a license for the operation of an amusement arcade (Amusement arcade license). The last two are issued by the local authorities. The premises license and the amusement arcade license are based on the same legal stipulation.
The fee for an exploitation license is €1,815 upon application and €453 annually. The fee for the aanwezigheidslicense is €56.50 . The fee for the amusement arcade license is specified by local authorities, who are free to set the price of this license. The total amount of license fees collected by central government from machine gambling is approximately €1.5 million.
The direct employment related to the operation of machines in catering industry and amusement arcades is indicated below. Employment related to the development, production and selling of the machines in not included.
There is one party that offers betting on sports (de Lotto) and one (Scientific Games Racing B.V.) that organises the tote on horseracing (Totalisator) events. Both are explicitly mentioned in the Act of games of chance. However, only 7,4 % of De Lotto sales is generated by sports betting and the remaining 92,6 % by lotteries.
Turnover /sales of the betting on (sports) events market was €310 million and gross gaming revenue was €148 million in 2004. Betting operators do not pay VAT on their services. The player has to pay 25% (29% from 1/12006) on prizes that exceed € 454. However, it is the operator who withholds this to transfer it to the state. This is, however, the regular gambling tax, which is levied on all prizes except casinos and machine gambling. The mandatory payments by De Lotto consists of approximately 95% revenues generated by lotteries. There is no license fee.
Sporttotalisator (Lotto): Obliged by its license to give at least 18% of proceeds of lottery ticket sales to charity. The Lotto is obliged by the license to use 47.5% of the proceeds of lottery ticket sales as prize money.
Totalisator (Scientific Games Racing B.V.): Obliged by its license to give 2.5% of proceeds of lottery ticket sales to charity.
Bingo is part of Title IA of the Act on games of chance. GGR in 2001 was €12 million (Source: Rapport Verkeerd Gokken). In 1998, estimated Bingo turnover was 117 million guilders (€53 million) and the gross gaming revenue was 27 m guilders (€12 million).
Unfortunately, no data are available for more recent years, number of operators or market share. In the Netherlands there is only charitable bingo and no legal commercial bingo.
Since gambling tax of 25% is only charged on winnings that exceed €454 and since the legal prize maximum in a bingo game is € 350, bingo prizes are not charged with gambling tax.
There is no license fee. The associations who organise bingo do so to raise money for charity. This is regulated in Title IA, article 7 a t/m d of the Act on the games of chance.
There is no fixed percentage of mandatory payments as all the net profit has to go to charity.
Bingo employees are mostly volunteers.
Media Gambling Services
According to the 2005 Motivaction report (Kansspelen via nieuwe media 2005), yearly spending in the Dutch internet gaming market is estimated to be between 62 million and 120 million euros in 2004. This means the estimated spending is reduced by approximately 50% compared to 2003. Yearly spending in the Dutch SMS or telephone gaming market is roughly estimated at between 59 million and 298 million euro.
UPC Digital TV subscribers can now receive an interactive gaming platform from Israeli Zone4Play Interactive Gaming Technology. The platform consists of four games: slots, video poker, blackjack and baccarat. This platform is based on a model in which players acquire points through a premium telephony system.
At this time, the Dutch government is working on a code of conduct for promotional games of chance. This code of conduct covers most of the media gambling services. If media gambling services don’t comply with the code of conduct, they are illegal. There is no separate legal initiative in the Netherlands for media gambling services. It is hard to separate media gambling services and sales promotional gambling in the Netherlands and therefore a lot of information is similar between these two sections of the report.
Almost every commercial media channel depends more or less on revenues from interactive gambling services, according to Endemol, a prominent international content developer, producer and distributor for television and on-line platforms. The most important players per channel are:
TV Channels: RTL4, RTL 5, Yorin, SBS6, Net5, Veronica, Talpa TV, MTV, TMF and The Box.
Radio Channels: Radio 538, Skyradio, Noordzee FM, radio 3 FM, radio 2 FM, RTL FM, Yorin FM, Radio 10 Gold, Veronica, etc.
Print: There are virtually no newspapers or magazines that do not have a form of Interactive gambling service in which additional revenues are generated.
Internet: More and more media consumption moves towards the internet. The same situation here is relevant as for the other channels. These additional, and in some case primarily revenue streams (see for example the Endemol owned www.tvgame.nl) are essential to keep these internet exploitations feasible.
The Dutch market is highly competitive in this area, which makes these additional revenues essential in surviving.
The best way to estimate the size of the Dutch Market in terms of gross revenues is to count the total sum billed to consumers on the media related premium rate and add to this amount 30% additional traffic from mobile operators. This gives a conservative estimate of € 80 million, which excluded SMS premium rate services in this area.
Although this number varies every season there are at least 25 TV formats, both daily as well as for a short period, which depends on the revenues from gambling services. The examples for the 2005 season were: Big Brother, Idols, Miljoenenjacht, 1 against 100, Lijn4, Puzzeltijd, Woordzoeker, Dagstrijd, Telegames, Nachtsuite, Chris Kras, Performing As, Lotto weekend Miljonairs and Dancing with Stars. Next to these formats, commercial broadcasters often combine a broadcast of a (foreign) movie with a Gambling Service where the game is editorially linked to the movie.
It is estimated based on the number calculated above that at least 85% of the total media gambling services’ revenues are generated by TV and radio, where the largest part comes from TV.
The revenues from gambling services are very relevant for publishers of both magazines as well as newspapers. The market leader Sanoma has about 35 titles which are not targeted to teens or children. Most of these titles have gambling services incorporated, both linked to editorial content as well from a promotional or an advertorial perspective. Some aspects of media gambling in the Netherlands are also explained in the Sales Promotional Gambling section of this report.
Sales Promotional Gambling
The Dutch Publishers Association represents the collective interests of all affiliated publishing companies throughout the Netherlands: publishers of books, newspapers, magazines and of electronic media (www.nuv.nl). Games that are offered by and/or in print media are considered as promotional games in the Netherlands. According to the Dutch Ministry of Justice, promotional games in magazines and newspapers where prizes can be won (even if the prizes are very small and participation is free) can be considered as games of chance (gambling), which are forbidden according to the current law (Act on Games of Chance), unless a permit has been given. The Dutch Ministry of Justice, at the end of 2003, started working on a code of conduct for promotional games of chance (including games in the editorial content of the media) to give the market more space for organising promotional games without a permit. The code will become a part of the Dutch Act on Games of Chance.
The Ministry worked on this code together with relevant parties who were invited to discuss this code and give their views on it in a special working group (so called co-regulation). The Dutch Publishers Association participated actively in this working group. The Code of Conduct for Promotional Games of Chance has come into effect on 1 January 2006.
The final version of the code of conduct is not favourable for publishers who organise promotional games, such as ‘call-and-win’-games. The maximum of communication costs is € 0,60 per game, as stipulated in the code of conduct. Furthermore the code says that promotional games can only be organised once a year per product, service or organisation, and a game may only contain 13 drawings. This means that a weekly magazine can no longer offer a promotional game (in the editorial content) each week. The maximum prizepackage of a promotional game is €100,000 per year. The exception is for small promotional games (games with prizes beneath €4,500, for example a prize-puzzle in a newspaper where a participant can win a gift coupon of €25). These can be organised as much as publishers want.
There is a number of charitable lotteries in Netherlands. They are described in the “Lotteries” section of this country report. According to the Ministry of Justice, it was estimated that the total sales of local charitable lotteries amounted to 10 million Euro in 1998.
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