An increase in taxes on Dutch online casino platforms seems to have had the unintended consequence of reducing the revenue generated for the Dutch government from the industry.
The online gambling market in the Netherlands is one of the most regulatorily secure in Europe, but recent tax changes seem to be having unintended consequences. Changes have been made recently to both the tax expected from regulated platforms as well as to player protection expectations. The expectation of the tax changes was to see more revenue generated for the Dutch government from the highly lucrative online gambling market, but projections are showing instead that there could be as much as a €200 million shortfall.
The tax hike, combined with some other factors, seems to have been the catalyst to push a number of players away from the regulated online casino market in the Netherlands, and towards offshore operators. While offshore platforms that service the Netherlands, such as the ones highlighted on Zamsino Nederland, are typically safe for players, they do not contribute towards the national economy. Let's look a little closer at why good-intentioned regulatory decisions may have caused damage to a market they were trying to benefit.
Taxes Levied with the Best of Intentions
The newly levied tax increase for online gambling operations is a significant one, although only partly in effect as of the writing of this article. The tax increase is phased, with the first phase coming into effect at the beginning of 2025, raising the rate of tax from 30.5% to 34.2% of gross gaming revenue (GGR) throughout the year. The second phase is due to come into effect at the beginning of 2026, raising the tax further to 37.8%.
The increased tax is due to high profit reporting from the regulated online gambling market in the Netherlands. The government had determined that a higher contribution towards problem gambling initiatives and other beneficial social programs would be a good use of that success.
At the outset, industry stakeholders for the Dutch online gambling industry were criticising and raising concerns about the tax increase. The Netherlands is already well known for having some of the strictest rules around advertising and compliance for its gambling sector. Many operators have claimed that the increase in taxes is walking the line of bringing the market to unprofitability, and could cause the sustainability of the healthy and regulated market to come under threat.
Pressure on Regulated Operators Leaves Offshore Platforms at an Advantage
The Netherlands regulated and legalized its online gambling market in 2021, with the Remote Gambling Act (KOA). As we mentioned earlier, it has a reputation for being one of the most rigorous and difficult gambling markets in Europe for operators to enter. This is by design and is to ensure that only financially sound operators who will act trustworthily and hold player protections to a high standard are able to operate legally within the Netherlands.
At its outset, this seemed a good strategy, and one that worked for a time. As time has passed, however, increasing regulatory strictures have come into place, including restrictions on advertising possibilities and a greater emphasis on monitoring for problem gambling players. As restrictions have tightened, some operators have found that they are less able to compete and offer the same levels of service.
With the introduction of a new tax burden, one that is set to increase before too long, it seems that the final straw may have been laid on the camel's back. Operators seeking to do the right thing and work within the regulated environment are facing increasingly high costs to do so, while other operators who exist offshore are able to undercut them. Bonuses, promotions and even jackpots are all shrinking on most regulated operators' platforms, while offshore platforms are able to offer better terms to players, enticing them away from the regulated, and theoretically safer, market.
The projected €200 million shortfall is a sign of the times. Players have already started venturing beyond the safety of the regulated Dutch online casino market, taking their money with them. Higher taxes have resulted in less tax revenue generated than expected.
Other Factors at Play
We mentioned earlier that the tax hike is not the only factor determining the shift in revenue generation. As well as the increase in gambling tax, there have been new rules introduced for the amount that players are able to deposit in a month. While this rule is unlikely to affect every player, it is yet another impediment in the way of regulated operators and another potential string to the bow of offshore platforms.
There have also been increasing pressures and bans on advertising and sponsorship for online gambling platforms. Since 2023, the advertising of online gambling services has been heavily restricted. While this has been signalled as an important step for responsible gambling, it has undeniably made it difficult for operators that exist within the regulated market to attract new customers.
Offshore operators have no such restrictions. As the rate at which players use regulated platforms falls, it seems likely that players who want to be free to spend what they like, or simply who have seen advertising for offshore platforms more readily, are spending their time and money outside of the regulated market.
Final Thoughts
The future is impossible for anyone to predict, but it seems likely that if the Netherlands go ahead with the second phase of the tax increase, regulated operators will fall even further behind their offshore brethren.
The loss of a projected €200 million annually could speak the right sort of language to the government and encourage them to shepherd the regulated online casino market they have. So far, they have announced that they are not considering changing their plans.
