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The Netherlands Gaming Authority (KSA) has imposed a €2.07m fine on LCS Limited, a Malta-based operator with an MGA licence. 

The fine comes after LCS Limited was issued a cease and desist order in August 2022 for offering online games of chance to Dutch players via the sonsofslots.com website without the required licence.

The fine amount imposed by the KSA was calculated in accordance with the regulator’s existing fine policy, which considers various factors, including the company’s turnover in the Netherlands.

KSA investigation

The KSA had been investigating the situation since March 2022, when it discovered that the website was accessible from Dutch IP addresses, enabling individuals with Dutch addresses to create accounts and deposit funds to play slots without proper age verification.

The investigation revealed that during the registration process, the website automatically pre-selected “Netherlands” in drop-down menus and filled in the country code for the Netherlands (+31).

Additionally, the Netherlands was not listed as an excluded country in the site’s terms and conditions.

A follow-up check on 12 July confirmed that Dutch individuals could still access the website and play slots. 

The website had not implemented any technical measures to prevent Dutch players from participating.

Taking more severe action on 17 August 2022, the KSA issued a cease and desist order to LCS Limited, accompanied by the threat of a weekly penalty of €55,000, with a maximum penalty of €165,000 if compliance was not achieved. 

Following this order, the website was checked again on 14 September, and it was confirmed that Dutch players could no longer access games of chance on the site.

KSA chairman René Jansen commented: “An order subject to penalty is an often very effective method to immediately stop illegal supply. 

“However, illegal providers who subsequently go dark 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.”

LCS challenges findings

LCS contested the KSA’s conclusions, arguing it was not focused on the Dutch market. 

The firm also claimed the reported number of website visits was inaccurate, as well as the estimated turnover from Dutch visitors, and argued that the KSA exceeded its authority in imposing sanctions after already hitting the firm with a cease and desist order. 

They also criticised the report’s preparation and the decision-making process, citing concerns related to legal certainty, trust, and fair play.

KSA responds

In response, the KSA clarified there was no legal barrier preventing it from imposing both reparative and punitive sanctions for the same violation.

The authority also explained that it relies on Similarweb, a web traffic insights platform, to estimate site visits. 

While these figures are estimates, the KSA said it supplements Similarweb data with information from independent sources to provide a reasonable benchmark.

The KSA also offered LCS the opportunity to provide verifiable information, which it did not do.

Moreover, the KSA highlighted that it is not obligated to determine LCS’s exact turnover in the Netherlands, but rather to impose a fine that reasonably corresponds to the violation.

The KSA highlighted that LCS failed to prevent underage gambling and also addressed LCS’ inactivity fee imposed on players. 

Players were charged a monthly amount of €5 if they hadn’t used their accounts for more than six months.

The KSA viewed this inactivity fee as a substantial disadvantage to players, as they lose money without receiving any reasonable service in return.

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