In an aggressive revenue-generating decision, the Dutch right-wing coalition comprising the PVV, VVD, NSC, and BBB political parties decided to increase local gambling taxes. However, unlike the gambling tax increases we have seen in other regions or even in previous years in the Netherlands, this is not a manageable 1%-2%, but rather a hefty 7.3%.

Join us as we learn more about why this decision has been deemed necessary, its impact on channelisation, and how it will affect responsible gambling in the Netherlands.

A Night Fun and Pizza

We all know that trying to scuttle a thriving industry on an empty stomach is never a good idea.

Ahead of their decision to impose a crippling tax increase on the licensed gambling sector in the Netherlands, the head of the VVD faction, Dylan Green, posted a picture on social media of the stack of pizzas they had piled up to see them through the discussion.

The outcome of the carb-fuelled evening was that online casinos and betting sites looking to operate in the country legally would see their tax burden increased from 30.5% to a staggering 37.8%.

According to the joint coalition's announcement, it could have been much worse. They wanted to increase government revenues by €400 million per year, but the proposed increase will only net them €202 million.

 Another Industry Body Blow

It often seems that the decision-makers in these groups do not realise that online gambling, like any industry, is a business of margins. It is not an endless inflow of "free money." Instead, it is a tightly managed sector that shows profits from its reach rather than the actual baseline income level.

The impact of player withdrawals, licensing fees, banking transactions, advertising, local and international staffing, casino software provider fees, chargebacks and all other ancillary service costs are ignored as they focus on gross gaming revenue.

What makes this proposed tax increase particularly heinous is that it comes hot on the heels of a decision by the Dutch government to ban untargeted gambling advertising (untargeted is already banned) and the potential ban of Online Slots.

The prohibition on targeted online casino and betting advertising will come into effect in July 2024, while the slots ban is now with Franc Weerwind, the minister for legal protection, who has the final say on the matter.

 A Lone Voice of Reason

However, the Netherlands Online Gambling Association (NOGA) has voiced its concerns over the irrationality of the proposed ban on online slots, calling it “thoughtless and irresponsible.”

NOGA director, Peter-Paul de Goeij, said:

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“The House of Representatives is taking an expensive gamble with online players who are now consciously opting for the legal offer. If we soon find that politicians have made the wrong decisions too hastily, the house will be responsible for the negative consequences.”

They rightly point out that given the popularity of online slots, the decision to ban the game type would definitely see more Dutch players abandoning licensed online casinos to play at unregulated offshore sites.

This action would reduce the government's annual revenue, which is already short of the stated goal of €400 million, while putting casino players at risk of unregulated welcome bonuses, game payouts, and more.

Should the casino tax rate increase be implemented at the same time, you will find gambling sites dropping their licenses and joining the pool of unlicensed operators waiting to welcome these players with open arms.