Trouble in Holland Over Internet Gambling

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There is open confrontation between Dutch Justice Minister Hirsch Ballin and the country’s banking fraternity over the minister's UIGEA type approach to Internet gambling. The situation is not identical to that in America because Ballin is trying to prevent competition to Holland Casino, which enjoys a monopoly over Internet gambling in the country.

The genesis of the confrontation can be traced back to January this year. After an exclusive three-year license proposal for Holland Casino was turned down by the Dutch Senate, Ballin proposed a temporary license for the state run monopoly through his Online Gambling Act. The Act also proposed that the Ministry of Justice should take action against financial institutions involved in transactions with other Internet gambling companies. The minister held that such Internet gambling companies were "unlicensed" and therefore transactions with them were "illega". Ballin even tried to rope in Internet Service Providers that were providing access to these Internet gambling sites. The Minister cited article 1 of the 1964 Gaming Act in support of his proposal but legal experts disagreed with this position. Both the Dutch Banking Association and 'Currence', the leading Dutch Internet Service Provider, refused to co-operate in an initiative that did not have a sound legal basis.

Then in March the minister again sent a notice to the Dutch Senate stating his intention to curb illegal Internet gambling. The earlier hue and cry led to a somewhat mellowed proposal from Ballin this time. He said that only the provision of bank accounts to Internet gambling sites would be considered illegal. Ballin had a list of 30 Internet gambling operators prepared by his staff, which was sent to the Dutch Banking Association for compliance. The Ministry press release accompanying the instructions warned of possible legal action for non-compliance. Legal experts were quick to point out that the directive from Ballin was a toothless one because the Ministry had no authority to indict those who refused to comply. The Ministry could at best complain to the public prosecution department, which would decide whether to prosecute or not.

Now, in November the Dutch Banking Association has informed Ballin that they are not in a position to implement his proposal since it is impractical to do so. The scene is obviously set for a confrontation between Ballin and the banks. What is important is the timing of the Dutch Banking Association's reply to Ballin. It has come at a time when the European Union is trying to impose uniformity in Internet gambling laws in accordance with its principles of supporting free movement of goods and services between EU member nations. The Dutch government has already received a notice from the European Commission asking it not to exclude competition from other member nations. The European Commission could even take the Dutch government to the European Court of Justice.

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