Saudi Arabia witnesses a surge in online gaming.
Following some delays, the legalization of Dutch online gambling is just around the corner. The licensing of international providers will start in April. According to the statements made by the gambling authority responsible, KSA (Kansspelautoriteit), a significant boom is on the horizon: By 2024, the gross income is estimated to reach 1.1 billion euros. Of this amount, 69% (around 757 million euros) would be generated within the legal sector.
Player protection overrules growth. A few weeks before the initiation of the licensing in the Netherlands, the national gambling authority KSA released optimistic predictions for the future development of the market. A detailed report titled "Scope of the Online Games of Chance Market" discusses the prospects of regulated online gambling and also examines the potential implications of legalization.
The industry is anticipated to witness considerable growth. By 2024, the gross income is expected to reach 1.1 billion euros, with 69% (approximately 757 million euros) of the profits coming from the legal market. KSA mentions the results of recent market research companies H2 Gambling Capital and Regulus Partners (London) while providing details about this. Regulus recently estimated the Dutch online gambling market at 827 million euros without differentiating between legal and illegal providers. As per KSA's Managing Director, René Jansen, a substantial part of the job will be to keep the remaining illegal offer as minimal as possible after legalization. The current report plays a vital role in this process.
Jansen also mentioned that they are currently exploring potential options in the direction of Denmark and Sweden, where gambling reforms have also been carried out in favor of the online sector. The current concern is how to effectively supervise online gambling. The experiences and practices from already regulated markets are vital for successful supervision. When supervising future license holders, the focus should be on ensuring optimal player protection. This is the key priority in the reform.
Objectives of the Remote Gaming Act
The Remote Gaming Act is a remote gambling law that allows legalization and regulation of international online gambling providers in the market. The legislative amendment was passed by the Senate and the Upper House of the Dutch parliament in February 2019, paving the way for the official legalization of online gambling.
As mentioned earlier, all interested parties must display comprehensive strategies for responsible gaming to be eligible for a license in the market. The principal aim of the law is to divert customers towards the legal market, corresponding to the new German State Treaty (GlüStV). In the Federal Republic, the licensing process is already underway, with the market opening scheduled for July 1, 2021.
According to the Dutch Gaming Authority (KSA), over one million Dutch residents occasionally or frequently participate in online gambling. However, these individuals could only play at unregulated providers, many of which are licensed in the EU and operate within the European service freedom. Without proper national regulation, customers were not adequately protected, stated the KSA. A reduction of at least 9 out of 10 players from non-licensed providers is achievable.
The new KSA report highlights that online gambling, even though it is illegal, has experienced consistent growth in recent years. Legalizing the market to European standards thus seems logical and also offers numerous benefits: better control mechanisms, job creation, and higher tax yields. The report suggests that growth without the announcement of legalization would likely have been even stronger. As a result of increasing digitalization, continuous growth is observed in both regulated and non-regulated countries.
Is the tax rate threatening the channelling?
This same concern is also highlighted by the company H2 Gambling Capital. It is observed that the relatively high tax rate of 29% on online gambling could function as a significant hindrance to channelling into the legal market. In Sweden, for instance, the tax rate is just 18%, while in Denmark, it is 20%. The primary goal of the Remote Gaming Act could potentially be significantly affected by this issue.
A parallel can be drawn with the Federal Republic, where a gambling tax of 8% on slot machines is being discussed. Usually, only the gross player winnings and not the game stakes are taxed. Research results from the universities of Bochum and Düsseldorf indicate that online casinos would be forced to lower their payout rates under this tax burden. These offers would then not be attractive enough to maintain a successful channelling.
Read also:
Source:
