Lotteries in the world

Every day people all over the world establish their own lottery. They have good experiences as lottery players themselves or think that their living place can use one. However, it’s not really easy to establish your own lottery. You have to deal with all kinds of rules. For example, you’re required to apply for a permit.

What are the rules in the Netherlands for lotteries?

The Dutch government monitors the developments on the gambling market closely and wants every gambling company to have a permit. Not everyone can establish a lottery, as can be read in the Gambling Law. It has some strict rules, including one that states that a lottery must be organized without commercial purposes. Besides that, a part of the revenue must be donated to charities. The total costs must be 50 percent of the total revenue, and with the other half the lottery must help charitable organizations. Also important is that participants cannot have any influence on the outcome of the lottery.

Permit is necessary
The government finds it important that every lottery company has a permit. They can apply for a permit at the local municipality, but sometimes a trip to the Gaming Authority is necessary as well. The exact place where a company can apply for a permit depends on the total worth of the prize pool. If the total worth is above 4500 euros, the Gambling Authority gets involved. Otherwise you can just go to the municipality and start the process.

Term of the permit Holland

The worth of the prize pool is quite easy to calculate. Just add all the retail prizes and write down the result. This also applies for sponsored prizes by the way. Have you obtained a permit? Congratulations! You should be aware of the short term of a permit though. It usually only valid for six months. Another rule is that a company can only organize a maximum of thirteen draws in half a year. Did the municipality or the Gambling Authority not give you a permit? Raise an objection and try again. Good luck!

Are the some exceptions?
There are only a few exceptions when it comes to obtaining a permit. It’s not required for parties who want to organize a promotional game of chance, for example. When a company organizes a such a game it promotes itself, whereas participants have a chance to win money at the same time. You probably know that nursing homes regularly organize bingos. They don’t need a permit for this. There are some requirements though. For example, has to be reported to the municipality. Second, the company that organizes the bingo has to be at least three years old. Last, but not least, the total amount of prize money must not be higher than 1550 euros. An individual prize must be worth less than 400 euros.

Gambling taxes are important as well
Lotteries have to deal with more than just a permit alone. We haven’t spoken about taxes yet. According to the law, taxes have to be paid for prize money above 454 euros. Many lotteries bring this a fee for prize winners. Some companies also pay the taxes themselves. Whatever you do, make sure that your lottery participants are aware of the gambling tax. This prevents unpleasant surprises for you and them. It’s no fun when a winner is confronted with high taxes after winning a big prize. The tax authority in the Netherlands wants players to pay 226 euros when they’ve won a prize between 4500 and 45.000 euros.

Recently the Dutch Gambling Authority went to the Council of State to fight against international gambling companies who threaten their Lotto monopoly. The authority wants to prevent that other companies are going to organize Lotto draws as well. The Council of State ended in a rude awakening for the Gambling Authority though. The judge thinks that there should be a better motivation to have a lotto monopoly in the Netherlands. As a result, the Gambling Authority has to create a decree with better arguments.

Position of the Dutch government

The Dutch government is very reluctant when it comes to the gambling market. One of the reasons for that are the generous donations of Dutch game of chance providers to charity. Every year these companies give millions to sports and other foundations. For example, the Dutch Lottery donates 45 million euros to NOC*NSF every year. A total amount of 17 million euros is given to eighteen charities in total.

Monopoly of the Dutch Lottery

As a result of the Dutch gambling policies, the Dutch Lottery is the only organization who is permitted to organize the Lotto. It recently obtained the permit. As a result, international parties decided to go to court. They do not agree with the monopoly. They’ve had a successful start, because the judge at the Council of State partly agreed with them. The Court has its own arguments when it comes to the lotto monopoly. The judge thinks that there isn’t a lot of difference between charity supporting lotteries and lotto’s. However, only lotto’s have a monopoly. According to the judge, the Gambling Authority did not defend this difference very well.

Better arguments and clarity needed
The Court decision is a new chapter in a long battle between Dutch gambling companies and international providers. Currently the Dutch market isn’t accessible for gambling companies, despite several judicial verdicts. This will probably change in the near future though. It’s quite a problem that there is no clarity when and why a permit in the Dutch gambling market is granted and when it isn’t. By asking better arguments the Dutch Gambling Authority, this might be explained.

No sport quizzes and scratch card lotteries
The international gambling companies did not win the case completely though. They like to organize sport quizzes and scratch card lotteries as well. However, the Court ruled that it’s correct that this permission is given directly. It’s done this way because the government is very involved in the Dutch Lottery. By supervising everything and giving the Dutch Lottery a monopoly, criminality and gambling addictions can be prevented.