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Banning match fixing from the regulated online gambling market

With the new Remote Gambling Act (in Dutch: Wet kansspelen op afstand), online gambling will soon be legalized in the Netherlands. Operators of online games of chance can most likely apply for a license per 1 July 2020. As a result of the new legislation, providers of online betting can also apply for a licence. In addition to the 'general' risks of gambling addiction and fraud, the provision of online betting entails a particular risk: the risk of match fixing. In this blog we will discuss the rules to prevent match fixing under the new legislation.

Introduction

Online games of chance, also referred to as remote games of chance, are games of chance in which the player participates online and without physical contact with (the staff of) the organizer of the games of chance. Currently, online games of chance are offered on a large scale illegally. In order to deal with this effectively, a licensing system has been created. At this moment, the Ministry of Justice and Security is working out the details of the legislation. The Senate approved on the Draft Bill on Remote Gambling on 19 February 2019. The Netherlands Gambling Authority (hereinafter referred to as ”NGA”) expects that it will be possible to submit licence applications from 1 July 2020, with the online gambling market opening on 1 January 2021.

Games of chance are subdivided into the following categories on the basis of their characteristics and the associated risks: 1. casino games in which the players play against the licence holder; 2. casino games in which the players play against each other; 3. sports betting; and 4. betting on the results of horse races and harness races. The rules for online games of chance against match fixing apply to categories 3 and 4 (hereinafter referred to as "sports betting").

What is match fixing?

In the Netherlands it is only allowed to organize bets for sports bets (category 3 and 4). Other forms of betting, such as betting on election results, betting on the winner of the song festival or on the date of birth of a new prince(ss) are (and remain) prohibited.

Characteristic for sports betting is that the outcome of the game of chance is not determined by a random generator, but by the outcome of a sports match or events during sports matches. This entails the risk of manipulation. Match fixing involves athletes who manipulate matches, whether or not forced to do so, aiming to gain a financial advantage from made bets. Because of the risk of match fixing, the online gaming legislation pays special attention to preventing match fixing and protecting the integrity of the sport.

Rules to prevent match fixing

There are currently two licensed sports betting providers: Toto (part of the Dutch Lottery) and Sportech Racing (organiser of harness racing and horse racing). This will change with the new Remote Gambling Act. All providers of sports betting will soon be able to obtain a license and are subject to the supervision of the NGA. The rules to prevent match fixing are currently being worked out in subordinate legislation. We discuss a number of important requirements below.

Analyse for manipulation
It is not always clear whether games and competitions are sufficiently professional to be able to conclude sports bets responsibly. Therefore, the licensee should analyse matches for anti-manipulation safeguards before offering any bets. In its analysis, the provider must consider a number of interrelated aspects, including the extent to which (i) the outcome of the match is relevant to the competition of the sport in question, (ii) players are paid in a timely and adequate manner, and (iii) there is objective reporting of the match.

If the risk assessment gives rise to facts or circumstances indicating possible manipulation of a match, the licensee must take appropriate action and inform the NGA. It is up to the licensee to determine the nature of the measures to be taken in accordance with the risk identified. A possible measure is be that no bets may be organised on a specific match.

Matches on the ‘white list’ are excluded from the analysis. These matches are assumed to be organised sufficiently professional. Examples are the highest divisions and big cup tournaments in football, hockey, basketball and darts. However, this does not relieve the licensee of the obligation to analyse the course of the bet for any noteworthy and suspicious transactions and patterns, during and after the betting period.

Prohibited matches
Certain moments of play have an unacceptable risk of match fixing. These moments of play, listed on the 'black list', are prohibited for betting. These include: winning or losing individual games or a set in tennis, a public warning in boxing, a first throw-in, fouls, yellow or red cards in football.

Amateur games are prohibited as well, because they do not offer sufficient guarantees against manipulation. Furthermore, it is not permitted to organise bets on youth games, on matches where there is no objective reporting or if the outcome is of no relevance to the competition of the sport in question.

Monitoring gambling patterns
The licensee should monitor its offer of sports bets for notable and suspicious gambling patterns that may indicate the manipulation of matches. The licensee must immediately report (possible) irregularities to the NGA’s Sportsbetting Intelligence Unit and to the sports federation that organises the match in question. If necessary, the licensee must take additional measures, such as limiting the money staked or withdrawing the bet.

Integrity policy
The licensee must draw up an integrity policy. The policy of the licence holder should aim at combating match-fixing in relation to betting, by detecting suspicious gambling patterns or other gambling related signals that indicate possible match-fixing. Furthermore, the licensee should take appropriate measures to avoid any conflict of interests and to prevent the misuse of inside information.

Collaboration
In order to prevent and combat the manipulation of competitions and the related risks, a good information position of the various parties involved is of great importance. The licence holder must therefore cooperate and exchange information with, among others, the organisers of the matches, the sports organisations involved, the Dutch National Platform for Match Fixing and internationally operating partnerships such as the European Sports Security Association (ESSA) and the European Lotteries Monitoring System (ELMS).

Accountability
The licensee must set up its game system in such a way that it can account at all times for, among other things, the way in which the risk analyses were carried out, what the findings were and, if applicable, what action(s) it has taken as a result.

Conclusion

After the Ministry of Justice and Security worked out the details of the legislation, the definitive licence conditions can be drafted. It is not yet known whether the online gaming and betting market opening of 1 January 2021 will remain feasible. In the meantime, potential providers are advised to keep updated on the news of the NGA and to prepare as much as possible in applying for a license. We refer to the information from the NGA for potential providers in the Q&A here. If you would like to receive more information about a license application or match fixing, please contact Thomas van Essen or Nina Lodder.



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