European Gaming Lawyer magazine Autumn 2015 | Page 29

Dutch Betting and Gaming Act legitimately
and partly serves objectives other than those
of the MiFID, as stressed by the AFM, does
not mean that the MiFID leaves room for
AFM to refuse the requested licence. Neither
was it asserted nor proved that Article
4 of the MiFID Implementing Directive
(2006/73/EC) provides the AFM with said
possibility given that there is no evidence
of notification as referred to in the third
paragraph of that Article. For that matter
both the Dutch Betting and Gaming Act
and the MiFID provide for the protection
of buyers of financial instruments that also
qualify as a game of chance, and the level
of protection provided by the MiFID has
to date been deemed adequate by the EU
regulations.
Thus, the court ruled in favour of
Optieclub and ordered the AFM to take a
new decision on their licence application
within six weeks from date of the ruling.
Subsequent proceedings
Subsequently, the AFM lodged an appeal
before the Trade and Industry Tribunal
(“College voor Beroep van het Bedrijfsleven”).
Pending the appeal, the AFM also requested
injunctive relief from the district court in
Rotterdam to suspend the ruling in first
instance so that they do not have to issue
the licence pending the appeal. In contrast,
Optieclub requested injunctive relief from
the district court in Rotterdam that inter alia
the AFM should take an immediate decision
on their licence application, effectively
meaning that the licence should be issued
to them.
The interim relief judge upheld the

decision of the court in first instance
and ordered the AFM to take a decision
within two weeks. Subsequently, the
AFM had no other choice than to grant
the financial licence to Optieclub. The
company is operating under this licence in
The Netherlands as of 1 April this year and
(through notification and passporting) also
in the UK.
Conclusion
This ruling sends an important signal to
other Member States that MiFID does not
leave much room for interpretation by
regulators provided that binary options
can be qualified as financial instruments.
Whether or not the offering of binary
options would also meet the definition of
gambling is in principle irrelevant. MiFID
is aimed at maximum harmonisation and a
uniform and strict application of European
legislation in this field is necessary. As
such this marks a sharp contrast to the
regulation of gambling for which any hope
of harmonisation is absent at the European
level. The Dutch courts have clearly
highlighted the incoherency in the position
of the AFM, namely that offering binary
options is undesirable and contravenes
the Betting and Gaming Act whilst parties
offering binary options in other jurisdictions
may well have a financial licence and as
such are allowed to offer their services in
the Netherlands. In a similar way, the UK
is one of the few jurisdictions which has
regulated binary options as a gambling
product but they are now in the process
of reclassifying binary options as financial
products. One reason for this change is to

prevent inconsistencies in the approach as
to whether providers of binary options can
or cannot passport their products across the
EU/EEA.
It can be further derived from this
ruling that binary options brokers are not
necessarily required to obtain licences in
jurisdictions where binary options have been
explicitly regulated at a local level. Even in
the absence of a specific local regulatory
framework for binary options, ѡ