After a year of legal wrangling, KSA opted to impose the fine on MGA-licensed LCS for offering gambling without a licence through its Sonofslots.com igaming site.
This is a violation of the Dutch Betting and Gaming Act (WOK), which mandates all operators must be locally licensed to legally offer gaming services.
The initial penalty decision dates to August 2022, when KSA imposed a €165,000 penalty on LCS. KSA also ordered the Malta dotcom operator to cease and desist from offering unlicensed gambling.
“An order subject to penalty is an often very effective method to immediately stop illegal supply,” said KSA chairman René Jansen.
“However, illegal providers who subsequently go black should not think that they have ‘bought off’ their illegal activities: the previously committed violations can also be punished. In addition, we continue to carry out re-checks to verify whether the supply has actually been and will continue to be discontinued.”
KSA investigates LCS
KSA first launched its investigation of LCS in March 2022.
The authority established it was possible to access the site with a Dutch IP address, log-in and deposit money to play games of chance. The regulator noted the site did not verify a user’s age during the sign-up process.
The investigators also found the site automatically placed the Netherlands in drop down menus, automatically offered the +31 Dutch country code during sign-up and did not put the country in its list of excluded nations.
Additionally, data generated by the Similarweb analytics business showed the site received frequent traffic from the Netherlands. As such, KSA opted to impose the penalty and send the cease and desist order.
Following the penalty, KSA investigated Sonofslots.com to confirm it had complied with the order, finding consumers could no longer access the site.
LCS opts to dispute decision
The MGA-licensed slot operator disputed the decision, arguing that it was in fact not possible to log in and bet on the site from the Netherlands.
LCS also argued the Similarweb data is not an accurate reflection of the number of people who used the site to gamble. It also called KSA’s estimate of revenue based on this data “careless and not based on established facts”.
The regulator is also accused of exceeding its powers in the investigation and “carelessly” putting together the report on LCS’ activities.
Regulator responds to LCS
KSA responded to these points, pointing out that players actually participating on an unlicensed site is not in itself banned, but offering the site in the first place is.
In terms of the criticisms of the Similarweb data, KSA said that without firsthand information it must rely on estimates provided by objective third party sources. It argued this provided the correct benchmark for estimating visits.
“LCS is free to provide verifiable information about itself,” said KSA. “Such data could lead to the Gaming Authority adjusting the relevant variables. To date, LCS has not indicated that it wishes to make use of this option.”
It further said LCS “wrongly assumed” that events before the penalty was imposed cannot influence the decision later on.
“The penalty payment and the administrative fine are two different types of sanctions,” KSA clarified.
Original article: https://igamingbusiness.com/legal-compliance/compliance/ksa-slaps-lcs-with-e2-1m-fine-for-operating-without-licence/
