Dutch Regulatory Body Admitters Failure of Recent Taxation Policy on Gambling Sector
The Netherlands Gambling Authority (KSA) has acknowledged that the recent increase in the country's gambling tax rate to 34.2% has not generated the expected additional revenue. Despite the hike, which took effect on 1 January 2025, gross gaming revenue (GGR) has declined in both the online and land-based sectors.
The KSA's impact assessment revealed that the decline in GGR across the market has led to a fall in gambling tax revenues. The online sector, while facing a decrease in tax revenue, appears to be slightly better positioned to absorb the effects due to its flexibility to adjust payout ratios and cut other costs. However, the online gaming market is facing tighter responsible gambling regulations, including new affordability checks and spending limits introduced under the 2024 Policy Rule on Responsible Gaming.
The land-based sector, on the other hand, seems particularly impacted by the recent tax changes, largely due to having fewer ways to cushion the blow to profitability. As a result, the sector has experienced a 9% decline in the number of venues in Q1 2025, compared to an average decline of 6% between 2020 and 2025. The KSA continues to track the ongoing decline in the number of land-based retail locations.
Financially motivated measures, such as the gambling tax hike, conflict with the policy goal of improving player protection. The KSA chair, Michel Groothuizen, stated that the measures introduced to enhance player protection have made operations more financially challenging for gambling providers. The Dutch trade body VNLOK announced that the Dutch government lost EUR 200 million in potential revenue from the gambling sector since the introduction of the new taxation policy earlier this year.
The increase of the Dutch gambling tax to 34.2% has not generated additional revenue because the higher tax rate has not led to expected tax revenue growth, with projections indicating only about €40 million or a 5% increase in 2025. This suggests that the increased tax rate may have suppressed taxable gambling activity or shifted it away from the regulated market.
The KSA is monitoring the balance between fiscal objectives and the long-term viability of the regulated market, with a focus on the channeling of online offerings. Maintaining a safe and regulated gaming environment in the future will require serious, responsible operators, supported by a financially stable legal market. The authority emphasized that it continues to track the ongoing decline in the number of land-based retail locations.
In summary, the gambling tax hike has failed to boost revenues substantially and has mixed effects on the Dutch gambling market structure. The higher tax rate can disincentivize players or operators, potentially pushing players towards unregulated or offshore sites to avoid the tax, reducing taxable revenue for the Dutch government. The land-based sector, in particular, seems to be struggling due to the tax increase, leading to a decline in betting activity and competitiveness. The online sector, while facing a decrease in tax revenue, appears to be slightly better positioned to absorb the effects due to its flexibility to adjust payout ratios and cut other costs.
- The Dutch gambling authority, KSA, has highlighted that the new responsible gambling regulations, such as the affordability checks and spending limits, have made business operations more financially challenging for the gambling providers in the online sector.
- Despite the increase in the gambling tax in the Netherlands, which has led to a decline in gaming revenue across both the online and land-based sectors, maintaining a safe and regulated gaming environment requires financially stable businesses committed to responsible gambling practices.
