News item | 15-12-2023 | 13:42
Over the past period, an exploration has taken place into possible future options for the state-owned Dutch Lottery. This exploration is a follow-up to the evaluation of the state shareholding in the Dutch Lottery carried out earlier this year. Three of the four future variants developed are feasible. This involves the following variants: complete privatization while retaining monopoly licenses, splitting off only online gambling or maintaining the current situation. A decision on the future of the Dutch Lottery is up to the new House of Representatives and a new cabinet.
Three feasible variants
The exploration shows that three of the four variants examined are feasible: complete privatization while retaining monopoly licenses, only privatizing online gambling and retaining the Dutch Lottery as a state participation.
Complete privatization whereby the monopoly for prize lotteries disappears – and an open system is created – is not a feasible option. This variant entails drastic changes in the market organization and creates major financial and non-financial uncertainties for the public interests, for the Dutch Lottery, the state and the co-shareholder, represented in the NOC*NSF/ALN Gaming Interest Foundation (STAK).
The variants that are feasible have both advantages and disadvantages. If the Dutch Lottery is fully privatized, little will change in the current market organization, but the laws and regulations and the licensing conditions will have to be adjusted. So-called residual risks must be taken into account. This variant is in line with the state participation policy, which assumes that share ownership is not necessary if public interests can be safeguarded by legislation and regulations. This variant is also potentially the most financially interesting for the shareholders and the company.
Only privatizing online gambling is easier to implement compared to the above-mentioned variant because fewer changes are required in legislation and regulations. This variant does require an organizational split of the Dutch Lottery, which is disadvantageous for the company due to loss of efficiency. Keeping the Dutch Lottery as a state participation is also a feasible option. This variant has the advantage that the state retains maximum influence in safeguarding public interests. A disadvantage may be that the company may not be able to pursue the innovation and (foreign) growth that it deems desirable to remain a leading player in the gaming sector.
With the different variants, the possible financial consequences for fellow shareholders must also be taken into account in a final choice.
Process
The previous evaluation of the state shareholding showed that legislation and regulations offer opportunities for protecting consumers, preventing gambling addiction and combating gambling-related crime and fraud. This means that state ownership of the Dutch Lottery is not necessary. The subsequent exploration commissioned by the Ministry of Finance and the Ministry of Justice and Security was carried out to gain a clearer picture of whether the potential divestiture of the company is legal, proportionate and feasible.
The exploration therefore specifically looked at the safeguarding of public interests, the legal sustainability, the expected returns and the complexity and timeliness of implementation for the different variants. Co-shareholder STAK and the Dutch Lottery have also provided information and shared their views.
Follow-up
In the coming period, the ministries will continue to develop the three recommendations from the report. In this way, the usefulness and necessity of the monopoly permits are again mapped out. The changes in legislation and regulations required for privatization are also further elaborated in detail. In addition, discussions are being held with STAK about how an optimal balance can be found within the various future variants between the marketability of the Dutch Lottery on the one hand and the interests of STAK on the other.