In a ruling with significant implications for online gambling operators active in the Netherlands, the Dutch Supreme Court has today held that gambling agreements concluded between players and unlicensed gambling operators are not automatically void or voidable as a result of the offering of online gambling services without a license. 

Background

The Supreme Court’s ruling arose from two separate proceedings in which two Dutch District Courts were asked to decide whether Dutch players, who lost money after gambling with unlicensed online operators, were entitled to restitution. Both players argued that their operators' alleged violation of the Dutch Gambling Act rendered their gambling agreements invalid. To clarify certain Dutch law elements in this context, the Amsterdam District Court and the Noord-Holland District Court referred prejudicial questions concerning agreements with unlicensed online operators to the Dutch Supreme Court. 

The Supreme Court's ruling

The Supreme Court ruled that neither the text nor the legislative history of the Dutch Gambling Act indicates that the legislator intended agreements concluded with unlicensed operators to be null and void. Had such nullity been intended, the legislator would have been expected to explicitly feature this in the text or legislative history. The Supreme Court further held that the mere absence of a license does not render gambling agreements contrary to public order or good morals. The Supreme Court therefore concluded that agreements entered into with unlicensed online gambling operators are not void or voidable on the basis of Article 3:40 of the Dutch Civil Code.

Implications for operators

In recent years, a wave of claims has been initiated by players seeking to recover losses on the basis that agreements with unlicensed operators were invalid. Conflicting judgments from lower courts - though most judgments were in favour of the players - ultimately led to prejudicial questions being referred by District Courts to the Supreme Court. If the nullity argument had succeeded before the Supreme Court, this could have exposed operators to collective claims for compensation on the basis that the online gambling services were offered without a license, so that the agreements were invalid. Today, the Supreme Court definitively closed that door. Lower courts across the Netherlands will in due course resume proceedings in the pending player claim cases, applying the Supreme Court's ruling as binding guidance.

For more information, contact Roelien van Neck, Olaf Trojan, Quirijn Mohr or Thom Koetzier.