The Kansspelautoriteit (KSA), the Dutch Gambling Authority, has fined Malta-based online casino firm Gammix Limited 19.7 million euros ($21.3 million) for allegedly offering unlicensed gambling to players in the Netherlands. The company has slammed the “outrageous and unsubstantiated” penalty and vowed to fight the ruling.
This is the highest fine ever imposed by the KSA. According to NL Times, the previous record was 12 million euros ($13 million), charged to N1 Interactive Limited.
Gammix runs 21 different online casinos, according to their Malta Gaming Authority license. Dutch law requires online gambling companies to have a license to operate in the Netherlands when they provide services to users in that country. The fine is equivalent to 6.5 percent of the estimated gross revenue generated from users in the Netherlands, after taking into account unfair business practices.
The KSA alleges that despite repeated warnings and orders, the company did not take appropriate action to block players in the Netherlands from participating. Additionally, the company’s websites do not take the right measures to prevent underage people from placing wagers, says the authority.
The KSA wrote its decision in December and published it on Thursday. Meanwhile, Gammix has filed an objection in the case.
René Jansen, KSA chair
“Dutch players must be protected, therefore we are taking a strong stance against illegal gambling offerings,” said René Jansen, the KSA chair. “We often see that illegal operators pay little attention to player well-being and do not adhere to responsible gambling practices. This case exemplifies this, with the absence of clear age controls, which can be highly detrimental.”
The KSA says that an inspection showed that the company’s websites could be reached from a Dutch IP address. It was also possible to create an account using a Dutch postal address and phone number, and the Dutch ban was not specifically stated in the company’s terms and conditions.
The KSA says it tested this by creating accounts with multiple Gammix websites using registration information from the Netherlands, and depositing 20 euros in each from Dutch bank accounts.
‘Outrageous and unsubstantiated penalty,’ says Gammix
After the allegations and penalty, Gammix released a statement announcing its intention to contest the “outrageous and unsubstantiated” fine handed to them by the KSA. Gammix stated that the record €19.7 million penalty imposed is based on “falsified data, extreme inaccuracy and highly suspect mathematics.”
In the ruling, the regulator said that Gammix was adjudged to have allowed online gambling access for Dutch consumers, as well as not requiring age verification upon sign-up – something the company “wholeheartedly disputes.” Gammix says that accounts used to access its sites during the investigation were created in Luxembourg, with deposits made via credit card. It added that such action violates the sites’ terms and conditions, specifically the provision of false information upon sign-up.
The operator asserts that the penalty, totalling €19,679,000, has been calculated using figures from a proprietary web-traffic aggregation service and a multiplier of 240 Euros per click. Gammix claims this would show turnover that doesn’t exist. Furthermore, the company “strongly condemned” the KSA’s “mystery shopper” style of investigation, which, the operator argues, is an unjust basis for the record-breaking penalty.
The company in its statement said that Phil Pearson, Director of Gammix Limited, has vowed to “fight on all fronts until it receives an apology and retraction.”
He said: “The KSA has imposed upon our company a penalty that is both outrageous and unsubstantiated. Now that we are able to talk openly about the case, we can confirm that we are fighting on all fronts as, to us, this is an extraordinary and unnecessarily heavy-handed action from a regulator that many already regarded as unapproachable.
“When we received the first notice of a possible penalty, we reached out to them to say we have blocks in place. We also asked for any information they had that was material to the investigation, to ensure we remained in compliance with all guidelines - a request they appeared to ignore. Our lawyers also approached the regulator, in writing, to gain more information, but again no response was forthcoming.
“We had enabled a block on Cloudflare for any Dutch IP, we have no Dutch language or direct Dutch payment methods, and categorically do not target Dutch traffic. If affiliates list any of our brands on Dutch-facing sites, we cannot be held responsible for those promotions. However, once players reached the end site, they would not be able to register an account.”
Pearson concluded: “This fine is an absolute joke, and we will contest this in every possible way, at every possible turn. We will only rest once this outrageous penalty has been rescinded and we have received the apology we deserve.”