NOGA proposal huge financial boost for Dutch sports

by: Peter Hopstaken | 3 June 2021

(Translated by DeepL from original Dutch article on SportKnowhowXL)

The Dutch Lottery (Nederlandse Loterij) paid out a total of 168.5 million euros in remittances for the year 2020, as was recently announced. Dutch Olympic Committee and national sports federation NOC*NSF received 45.2 million euros – over a million euros less than last year – and the Dutch state received 106.1 million euros. In addition, a sum of 17.2 million euros went to eighteen charities. It elicited a short but powerful appeal from Peter-Paul de Goeij, which he distributed via Twitter and his LinkedIn account: ‘From now on, spend the entire remittance to the state on Dutch sport. That will give Dutch sport the major boost it needs to regain its vitality post-COVID‘.

If Peter-Paul de Goeij’s striking appeal were to be heeded, it would have enormous financial consequences for the Dutch sports world. After all, if the Dutch Lottery’s contribution to the state – i.e. 106.1 million euros in 2020 – were to be paid out in full to sport from now on, that would roughly triple the amount that NOC*NSF currently receives from the lottery fees and then largely ‘passes on’ to sports federations. But how realistic is that? Peter-Paul de Goeij’s stated wish is less gratuitous than you might expect at first glance. As the former CEO of the charity lottery Raffld and as current director of the Netherlands Online Gambling Association (NOGA), he is well versed in the lottery market, which is not easy to fathom with its complex licensing system, strict rules for remittances and strictly earmarked charities.

My proposal would indeed give an enormous boost to Dutch sport, which of course could really use it. After all, the corona crisis has also hit sports federations, sports clubs and sports schools hard. While they are socially so enormously important. Sport is desperately needed to get the health of the population back to its old level and then to maintain or even improve it. That extra money could therefore be used across the board – including gyms and fitness centres – and, as far as I am concerned, not mainly for the benefit of the larger sports associations as is currently the case with the distribution of lottery money. It offers the sport as a whole a quick and much more impactful support than just establishing a sports law, which was recently advocated by the Dutch Sports Council.

“The state could implement such a decision to earmark the remittance for sport without blinking an eye.”

Political choice

But would the Minister of Finance be delighted with De Goeij’s proposal? If the entire 106.1 million euros that the Dutch Lottery now pays to the State were to go to sport, would the State be missing out on a considerable amount of income? De Goeij: “It is first of all a political choice. Do we as a society want to give sport the support it deserves? In addition, the Dutch Lottery has long been on the list of state-owned companies that are candidates for privatisation. So, whether the ‘pain’ comes now or in a few years’ time does not make much material difference to the state budget. What’s more, the state could actually implement such a decision to earmark the contribution for sport without blinking an eye.

De Goeij emphasises that his proposal is also a much better alternative to another – in his view well-intentioned but unfortunate – plea by sports federations, to increase the financial burden by imposing a levy on every bet placed on Dutch sport matches.

Due to the new Remote Gambling Act, online gambling on sporting events will be allowed from October this year, for providers other than just TOTO, which currently has a de facto monopoly. In order to generate more money for sport, some federations are arguing for a surcharge to be levied on each bet made that would benefit the sport. Although this may seem sympathetic at first glance, it is not a good idea. Legal online gambling companies already face a relatively high gambling tax (29%). If they also have to charge their players a sports surcharge on top, the competitive position of the legal offer in relation to the illegal gambling companies will deteriorate enormously. Such an additional levy drives players away from the legal to the illegal betting offer. The direct consequence is that consumers are not protected, there is less effective or even no monitoring of betting patterns and therefore the risk of match-fixing increases instead of decreases.

“Roughly speaking, I expect the total sportsbetting market in the Netherlands to grow in the coming years”

Switch is not going to happen

The sports world finds gambling on sports matches interesting because of the resulting revenues. Does De Goeij not think that this income will hardly increase, given the possible switch by TOTO players to the new online offerings?

TOTO has been experiencing stormy growth lately. In recent years they have increasingly focused on online offers, and the new, very successful ‘King TOTO’ (Koning TOTO) marketing campaign has increased and rejuvenated the customer base. I have the impression that, in anticipation of the market opening, TOTO would prefer to mop up as many players as possible. But a switch is not going to happen, I think. Also bear in mind that from October onwards consumers will finally have something to choose from legally. Roughly speaking, I expect the total sportsbetting market in the Netherlands to grow in the coming years. In terms of percentages, TOTO will of course lose market share to the new competition, but in absolute numbers I think TOTO will continue to grow in the years ahead.

Also in another way, De Goeij expects a financially beneficial effect from the opening of the online gambling market to Dutch sport. “In recent months, in the run-up to that phased market opening on 1 October, we have already seen major sponsorship deals from the Dutch Lottery, Holland Casino and other providers with the KNVB and several Dutch football clubs. That casts the shadow of what we can expect: an increase in sponsorship for sport. Hopefully, this will also happen on a broad scale, i.e. including smaller sports and the smaller clubs, as they can also very well use such revenues. We at NOGA will keep an eye on responsible participation in gambling, moderate advertising and protection of minors and youth. And we will do our utmost to protect the integrity of sports and eradicate match-fixing. As a trade association, we are very aware of our responsibilities and we will act accordingly.