KSA admits that risk analysis mandates are flawed

• The KSA has admitted a second instance of regulation that hasn’t worked over the past couple of months
• The Dutch Gambling Authority has confirmed that operators have incurred additional financial costs without delivering consistent results, the fault of the proposed regulation
• Next steps already outlined by the watchdog as it seeks to amend the situation and introduce new guidance

The Dutch Gambling Authority (KSA) has been one of the strictest industry regulators in Europe, but unlike many, it has taken a deeply reflective approach to the way it runs things.

Much like Tim Miller, the UK Gambling Commission’s boss acknowledged in a statement, the KSA was spearheading regulatory efforts based on an evidence-based approach, and the watchdog already has a good track record to show.

KSA takes stock of its duty of care and finds serious flaws

In early August, KSA admitted that its tax hike had put the regulated market at a disadvantage, inadvertently empowering the offshore and black-market operations instead.

Now, the regulator has also acknowledged that its mandates related to risk analysis that license holders ought to carry out have been similarly a misplaced effort. In a statement published on its website, the regulator explained:

"This investigation shows that the risk analysis system included in the regulations is not functioning properly. Furthermore, conducting these risk analyses requires significant effort and therefore costs for online providers, while it appears to offer little additional protection for players."

The current system is not functioning optimally, the KSA remarked in its statement, and said that it is referring the matter to the Ministry of Justice and Security and engaging in discussions that can help establish a new regulatory framework regarding risk assessment.

Originally, the measures were meant to prevent gambling-related harm and gambling addiction and have become known as the "duty of care," but subsequent observation of putting this duty of care into practice has demonstrated that it may be a flawed approach.

The KSA outright acknowledges that these responsibilities have imposed additional costs on operators, making them less competitive, while yielding mixed results as to whether consumers have benefited from better market-level protections.

Existing measures are not optimal, and discussions to change them are underway

According to the KSA and its latest investigation of the matter, risk analyses do not "produce consistent results." This includes comparing the same games offered by different providers, or in some instances, the same products by a single operator, which is not the fault of the operators, the regulator explained.

"This makes it difficult to compare the outcomes of all the analyses performed. It was also noted that online providers usually perform the risk analysis per (game) category level, rather than per individual game," the KSA noted, adding that it will further deliberate on the matter and seek to fix what it has now acknowledged to be a flawed system.

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