The Dutch Gaming Authority (KSA) has imposed a record fine of almost €25 million on the provider Novatech. The reason: illegal online gambling with cryptocurrencies on the Dutch market. The size of the fine shows how seriously regulatory authorities take the use of anonymous payment methods in the gambling sector. This unprecedented sanction marks a milestone in European gambling regulation and sends a clear signal to the entire industry.
Cryptocurrencies increase money laundering risks
Authorities see crypto transactions as a significant risk for money laundering and terrorist financing. Unlike traditional payment methods, Bitcoin and other digital currencies are difficult to trace. This makes it much harder to control cash flows and makes it easier for criminals to conceal the origin of their funds.
Experts have been warning for years about the risks of anonymous payment systems in the gambling sector.
The pseudo-anonymity of cryptocurrencies allows players to conceal their identity and circumvent limits. At the same time, criminal organizations can use these channels to launder illegally acquired funds. The Financial Action Task Force (FATF) already issued stricter guidelines for crypto service providers in 2019 to combat this abuse.
Second provider also penalized
In addition to Novatech, Fortaprime SRL also received a penalty of €1.8 million. Both companies operated illegal gambling sites without the appropriate license for the Dutch market. Particularly problematic were the lack of age verification and targeted advertising by Dutch influencers, which directly violates local advertising regulations.
The KSA’s investigations revealed that both providers systematically targeted Dutch consumers. They used the Dutch language on their websites, accepted euro payments, and advertised specifically with local celebrities. These practices demonstrate a deliberate circumvention of Dutch gambling laws, which only allow licensed providers to enter the market.
Penalty could have been €100 million
KSA chairman Michel Groothuizen made it clear that the penalty imposed was actually too low. Without the legal cap of ten percent of global annual turnover, the fine could have exceeded €100 million. This statement underscores the extent of the violations and sends a clear signal to other providers.
The calculation of the penalty was based on various factors, including the duration of the illegal activities, the number of Dutch players affected, and the revenues generated. Novatech is said to have generated substantial profits from the Dutch market over several years without implementing the necessary protective measures for players or paying taxes.
Stricter enforcement of gambling laws
The Netherlands re-regulated its gambling market in 2021 and has since been cracking down on illegal providers. The KSA is working closely with banks and technology partners to block payment channels and websites. Investigators are particularly focusing on providers that rely on anonymous payment methods.
The new Dutch Gaming Act (KOA) has introduced strict requirements for licensees. These include comprehensive player protection measures, advertising limits, and strict anti-money laundering controls. Providers must demonstrate that they can meet these standards before they can obtain a license. Currently, only about 20 companies are authorized to offer online gambling in the Netherlands.
International implications of the decision
The record fine has attracted international attention and could serve as a precedent for other European regulators. Germany, France, and other EU countries are closely watching the Dutch approach. Many experts expect that similarly high penalties could also be imposed in other jurisdictions.
The European Union is currently working on harmonized standards for gambling regulation. The Dutch decision could serve as a model for EU-wide tightening of sanctions against illegal providers. The handling of cryptocurrencies in particular is at the center of the discussions.
The record fine against Novatech marks a turning point in the enforcement of European gambling laws. It shows that regulatory authorities are prepared to take action against large international providers if they deliberately circumvent local laws. For the crypto industry, this means increased control of gambling-related applications and possibly the end of anonymous payments in this sector.
