In a decisive move to curb illegal online gambling, the KSA (Kansspelautoriteit) of the Netherlands imposed a binding order on the web hosting giant, DigitalOcean. This administrative action followed an inquiry that spanned the year 2023, probing into websites suspected of facilitating unauthorised gambling activities.
The investigation initially targeted two specific domains, casinozonderregistration.net and Nieuwe-casinos.net, which drew KSA’s attention. The regulatory body struggled to locate or establish communication with the owners of these sites; however, their hosting provider, DigitalOcean, was readily identified. This discovery prompted the KSA’s board to exercise its regulatory power and issue the binding order to the hosting provider as per Article 1, paragraph 1(b) of the Netherlands’ Gambling Act, which forbids the promotion of or engagement in gambling by unlicensed parties.
After the KSA reached out to DigitalOcean about the two websites in question, the hosting provider acknowledged its role but stood firm on its decision not to terminate the services without a legal court order, despite KSA’s position that the websites in operation were doing so illegally.
In response, KSA solidified its stance with a letter on 22 September 2023, announcing its intention to levy the binding order. DigitalOcean, undeterred, once again requested a judicial order to take action on the matter. Absent such an order, DigitalOcean was reluctant to move forward.
On January 26, 2024, the situation escalated as the District Court of Rotterdam empowered KSA to proceed with its actions against DigitalOcean. The court’s authorization led to the official issuance of the binding order. DigitalOcean was given a deadline until March 22, 2024, to comply with regulations and take “all necessary measures” to rectify the infringement under the Netherlands’ Gambling Act. DigitalOcean faces the possibility of punitive measures or monetary penalties if there is a failure to abide by this directive.
Despite the potential repercussions, DigitalOcean retains the right to appeal KSA’s decision. The pressing order from KSA arrived soon after its agreement with another internet services firm, Cloudflare, to aid in pinpointing illegal gambling services in the Netherlands. This collaboration demonstrates KSA’s ongoing commitment to clamping down on noncompliant online gambling.
The binding order against DigitalOcean is the latest in a string of regulatory actions from the Dutch authority. In the previous month, the KSA levied a whopping €19.6 million fine against Gammix Limited for offering gambling services without proper authorization in the Netherlands. Gammix, which had been directed previously to exit the Dutch market, faced €1.4 million in potential weekly fines for noncompliance, culminating in the substantial €4.4 million fine levied against them.
Phil Pearson, a director at Gammix, vehemently denounced the penalty, saying, “The KSA has imposed upon our company a penalty that is both outrageous and unsubstantiated.” Pearson emphasized Gammix’s commitment to challenging the decision, criticizing the regulator for what he viewed as excessively harsh enforcement.
Further underscoring the extent of online betting in the region, KSA’s recent monitoring report shed light on a market flourishing with over one million active online accounts. As the Dutch regulator continues to sweep through the digital landscape, companies such as DigitalOcean find themselves tasked with the obligation to adhere to strict gambling regulations or face the stringent hand of regulatory justice.
