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Proposed Dutch Gambling Tax Could Negatively Impact Licensed Casinos and Their Players
By Shane Addinall Oct 29, 2023 IndustryThe proposed Dutch gambling tax has the potential to impact licensed casinos and their players significantly. Learn about the potential consequences of this tax on the online gambling industry in the Netherlands.Earlier this year, the Dutch Gaming Authority (Ksa) reported that the industry is beginning to mature. This statement was based on the fact that both new player registration numbers and gross gaming revenue (GGR) had slowed down dramatically between review periods.
Now, however, two Dutch MPs have proposed an increase in the local gambling tax, citing that the “popularity of online gambling has increased significantly” as the reason to put more financial pressure on the sector.
Crazy Gambling Tax Could Get Higher
Earlier this week, Dutch Members of Parliament Silvio Erkens and Chris Stoffer submitted an amendment to a bill that addresses excise duties on alcohol, tobacco, and gambling.
The proposal says the following in justification:
Quote“The popularity of online gambling has increased significantly in recent times. This has also led to a significant increase in the turnover of online gambling companies. Ideally, the increase in the gambling tax would only have resulted in a heavier taxation of online gambling.”
This statement stands in stark contrast to the most recent Ksa reports showing the increase in GGR dropped from +33% for August 2022 to January 2023 to only +8% for February to July 2023.
The proposed amendment seeks to increase the current gambling operator tax from an already restrictive 29.5% to 30.5%. In real terms, this would see operators paying an additional €26 million, as the tax is calculated on wagers less payouts and ignores all other running costs, including salaries, health care, rental, banking costs and more.
Solving a Problem, The Government Caused
What has been even more unusual is that the reasoning for applying additional pressure to the gambling industry is to save the alcohol industry from the insane new taxes the government has decided to levy.
The original proposal, to which this amendment was posted, contained an instruction to increase local alcohol taxes by 16%. While there has been no discussion of whether Erkens and Stoffer have a vested interest in saving the sector from this incredulous tax increase, they have spearheaded a drive to pull income from other sectors to lighten the burden.
In addition to increasing gaming taxes, they also proposed increasing tobacco taxes. If their amendment is approved, this will see the alcohol industry tax dropped from 16% to 8%.
Why Dutch Online Gamblers Should Care
Erkens and Stoffer were upfront about the fact that they wanted to load this additional burden on the online gambling sector, saying:
Quote“Ideally, the increase in the gambling tax would only have resulted in a heavier taxation of online gambling. However, the gambling tax is currently not differentiated with regard to different forms of gambling, which means that an increase cannot yet be focused on this group.”
Here are 5 possible outcomes of over-taxation of the online gambling providers:
- Licensed operators abandon the Dutch market due to it becoming unviable financially.
- Less competition means poorer incentives and promotions for players.
- Tighter costs can mean game payouts get set to their lowest allowed levels.
- Players could begin to see increased banking and transaction fees.
- Maximum withdrawal limits may be reduced and processing times extended.
The fact is that there is no way that increasing gross revenue-based taxation on an industry encourages its growth and stability. It will only lead to fewer licensed operators, a poorer player experience and the inevitable resuscitation of black market gambling.
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