Dutch authority KSA orders DigitalOcean to stop hosting grey market affiliates

The regulator’s cease and desist order requires the cloud service provider to stop offering its services within four weeks.

Failure to comply with this order could lead to a follow-up sanction including a potential fine, warned the KSA.

Under Dutch law, operators are required to have a local licence from the KSA. It is also prohibited for advertisers to promote unlicensed gambling sites.

Due to difficulty in identifying the individuals behind affiliate sites, the regulator said it had instead opted to target the hosting provider to enforce the law.

The move comes in the aftermath of a drop in the Netherlands’ channelisation rate.

Industry warns of unlicensed gambling rise

The rate of channelisation in the Netherlands fell from 93% to 90% between July and December 2023, according to the regulator’s recently published Online Gambling Monitoring Report.

Industry trade body the Netherlands Online Gambling Association (NOGA) argued the figures show Dutch consumers have been gambling with unlicensed operators.

The body also highlighted that the drop occurred in the aftermath of the country’s almost total ban on gambling advertising.

NOGA director Peter-Paul de Goeij said: “With too many locks on the door, the online gambling Dutchman goes one door further, to one of the tens of thousands of illegal gambling sites.”

The KSA said it takes various measures to combat unlicensed gambling, including by working with payment and internet service providers.

It added that it has conducted extensive research into the affiliate issue over the past two years.

The regulator announced last week that it had come to an agreement with US web security firm Cloudfare to combat unlicensed gambling.

The internet business has committed to sharing critical data with the KSA about the hosting companies behind illegal gambling sites.

By accessing this information, the KSA said it hopes to significantly boost its investigative and enforcement capabilities.