This week, the Dutch gaming authority, Kansspelautoriteit (KSA), imposed a major sanction on Novatech. This penalty, totaling €24.9 million, marks the largest fine ever levied by the Dutch regulator against an offshore operator.
Although Novatech previously held a license in Curacao, the operator has terminated its registration with the Curaçao Chamber of Commerce following the fine’s issuance.
The substantial penalty amount highlights the significant scale of the company’s operations in the Netherlands, emphasizing the threat posed by the black market even within a strictly regulated environment.
When announcing the sanction, KSA Chair Michel Groothuizen commented: “The fine is calculated based on the (estimated) revenue the illegal provider generated from Dutch players.
“In this process, we are constrained by legislation that caps the fine at a maximum of 10% of global turnover. Novatech earned hundreds of millions from its illicit services, primarily from Dutch customers.
“A €24 million fine appears substantial, but without the 10% limit, the penalty would have exceeded €100 million—a figure more appropriate for the severity of this violation.”
It seems Novatech chose to voluntarily dissolve its Curacao license to evade the Dutch authority’s sanction, an action that brings into question the effectiveness of enforcement measures and how such companies can be addressed.
After the fine was announced, many questioned its enforceability. Nonetheless, pressuring the company to relinquish its Curacao license represents a notable impact.
While Novatech may find other markets to operate in, the KSA’s actions appear to have been effective and have influenced the company’s strategic direction.
The momentum from the KSA’s sanctions was bolstered by the Swedish Gambling Authority, Spelinspektionen, which also took action against the operator.
Spelinspektionen initiated its case against Novatech based on accusations of providing unlicensed games to players through numerous websites, with player protection concerns cited as the primary motivation.
Wider regulatory action
The Court of Justice of the European Union (CJEU) has expressed the view that EU states should be permitted to use insolvency proceedings to freeze the bank accounts of online gambling operators lacking European licenses.
This would significantly strengthen regulators’ ability to take legitimate action against offshore operators.
This opinion followed a claim by a German player attempting to recover roughly €57,000 in online gambling losses from an operator based in Curaçao. After securing a default judgment in Germany, the claimant sought to freeze accounts thought to belong to the operator in Cyprus using the European Account Preservation Orders (EAPO).
This case has the potential to change how regulators approach offshore operators.