KSA Cautions iGaming Operators Over Cashback Bonuses And Delayed Payments

Summary

• The Dutch gambling regulator has warned operators providing cashbacks is illegal
• The KSA said cashback bonuses incentivize customers to play more
• The KSA order comes as Franc Weerwind reminded operators to pay players without delay

Gambling operators in The Netherlands are now prohibited from giving cashback bonuses to their customers following an order from the country’s gambling regulator, Kansspelautoriteit (KSA).

Advertising rules implemented under the Remote Gambling Act (KOA) include stringent restrictions on the type of bonuses that can be offered to players. The KSA has asserted that bonuses provided in the form of cashback violate the law.

Cashbacks Encourage Customers to Gamble More

In a letter sent to licensed operators in the country, the KSA warned that those continuing to give cashback bonuses to customers will be sanctioned, noting that such bonuses allow customers to “get back part of their losses”, encouraging them to gamble more. This, according to the regulator, is a violation of KOA advertising rules and could result in immoderate gaming behavior among players.

Under gambling advertising rules in effect since April 1, 2022, bonuses should not be offered as a form of incentive for customers to play more and increase their engagement with a particular gambling service or product. Cashbacks work just like that, according to the KSA, and are therefore illegal.

Operators Should Pay Customers Without Delay

Meanwhile, Dutch Minister of Justice Franc Weerwind urged operators to avoid delaying payments to customers, though he also reminded them to carry out the necessary checks to combat money laundering and fraud. Weerwind made the comments while he was answering questions from the Parliament regarding the payment of funds and winnings by online gambling operators.

Weerwind said the speed of payment transactions could be different from one online gambling provider to another and depends on the circumstances of the case. Inevitable delays might be experienced if the funds are subject to checks for fraud and money laundering, or in the case of bonuses, providers usually verify first if wagering conditions have been met before releasing the amount, he said.

The Minister said the standard remains that operators should pay their players “without undue delay”, with the KSA authorized to intervene if it finds irregularities in the payment transactions.

Weerwind was also quizzed about one-off cancellations of payments and reverse withdrawal requests, and the Minister sees nothing wrong with that, saying that players should be able to control the amount of money in their respective gambling accounts. He added that the matter is covered by the operators’ duty of care.