Dutch gambling authority acknowledges increased tax burden led to unfavorable outcomes
The Dutch Gambling Authority (Kansspelautoriteit) has admitted that a tax increase implemented on January 1, 2025, was counter-productive, leading to a significant decline in gross gaming revenue (GGR) and a resulting €200 million shortfall in tax revenue.
From an industry perspective, the higher tax rate pressured licensed operators financially, forcing them to cut costs by reducing advertising and lowering payout ratios. This undermined their competitiveness and viability, with smaller operators particularly affected and some scaling back marketing or pausing expansion. The number of physical gambling venues also declined faster than average, with a 9% quarter-on-quarter drop in early 2025.
Concerning consumer protection, the tax hike and associated tighter regulations—such as deposit limits and bans on untargeted advertising—have had unintended consequences. Players, especially high-value ones, are reportedly migrating to illegal or unlicensed gambling platforms where protections are weaker, but bonuses and payouts are better. This trend threatens the policy goal of providing a safe, regulated gambling environment and increases risks for consumers.
The KSA itself has publicly criticized the fiscal strategy behind the tax increase, stating it is at odds with the goal of player protection and undermines the financial viability of licensed providers. The regulator warns that the current framework could lead to the erosion of the regulated market’s share, impairing both tax revenues and effective oversight of gambling activity.
In summary, the Dutch Gambling Authority’s tax policy has:
- Failed to boost tax revenue as intended, causing a significant fiscal shortfall.
- Weakened the licensed gambling industry, reducing revenues and the number of physical venues.
- Encouraged player migration to illegal operators, compromising consumer protection goals.
- Prompted calls to reconsider the balance between taxation, regulation, market sustainability, and player safety.
The encroaching black market is a concern due to the tax increases, with a significant portion (50%) of the total gambling spend in the country now with offshore operators. The Dutch Gambling Authority is one of the few regulators to actively admit fault and revisit decisions.
The German Gambling Regulator has faced accusations that its policies are leading to the deepening of illegal gambling and sapping the competitiveness of the licensed gambling sector. In high-tax regimes, entrants don't just falter, they disappear.
References: [1] VNLOK estimates. [2] Kansspelautoriteit Chairman Michel Groothuzien's statements. [3] Matej Novota, Head of Casino Research, statements. [4] Kansspelautoriteit's public criticisms. [5] Early estimates backed by trade groups such as VNLOK.
- The higher tax rates and stricter regulations in the casino-and-gambling industry, as enforced by the Dutch Gambling Authority, have driven players towards unlicensed platforms due to better bonuses and payouts, threatening general news headlines regarding consumer protection.
- Policy-and-legislation changes in the gambling sector, like the tax increase in the Netherlands, have raised concerns about the viability and competitiveness of licensed operators, particularly in high-tax regimes where smaller operators are being severely affected.
- The ongoing debate in politics surrounding gambling trends reveals that that regulation and taxation policies need to maintain a balance with market sustainability and player safety to prevent the growth of the black market and ensure the financial viability of the licensed-and-regulated gambling sector.
