Dutch Gambling Business Worry About 25% Decrease in Gross Gaming Revenue
The Dutch gambling industry is grappling with a significant drop in gross gaming revenue (GGR) for the first half of 2025. According to official projections, the GGR is expected to be 25% lower than the same period in 2024. This decline can be attributed primarily to a gambling tax increase from 30.5% to 34.2%, implemented in January 2025, and the introduction of stricter player protection regulations.
The higher tax rate has placed increased financial pressure on gambling operators, leading them to cut costs, reduce advertising, and lower payout ratios. This diminishes player incentives, causing some to seek alternatives in illegal gambling venues where higher bonuses and better payouts are offered. This shift has undermined the legal market, resulting in a shortfall in reported GGR.
The land-based gambling sector has been particularly affected, with a 9% decrease in the number of gaming venues in Q1 2025 and revenue losses due to fewer options to absorb the higher tax burden. New responsible gambling measures, such as deposit limits and affordability checks, have also constrained gambling activity.
Operators in the industry believe that bigger spenders have transitioned to offshore gambling sites, which are not subject to the deposit limits and tax regulations in the Netherlands. This shift could potentially lead to a decrease in revenue for both the government and the gambling industry in the Netherlands.
Lawmakers in the Netherlands increased the tax on GGR by 4%, effective from January 1, 2025. The gambling industry's trade body, the Licensed Dutch Online Gambling Providers (VNLOK), believes that the GGR drop is due to the government's restrictions on the legal market. The Kansspelautoriteit (KSA), the gambling regulator in the Netherlands, is set to release official figures this week regarding the discrepancies in the industry.
Operators are also bracing for another 3.6% rise in the tax rate on GGR, increasing it to 37.8% in the following year. The tax intake from the gambling industry for the first half of 2025 is projected to be approximately 83% of 2024's level. The new tax increase could potentially drive more operators to offshore locations, causing a €200m ($231m) shortfall for the year 2025.
The Dutch government's efforts to increase revenue through higher taxes and stricter regulations may have had unintended consequences, leading to a decline in the legal gambling market and a shift towards illegal activities. The KSA's official figures, to be released this week, may provide more insight into the impact of these measures on the industry.
The increase in taxes for the gambling industry, particularly in the finance sector, has resulted in operators seeking alternatives to decrease financial pressure, leading some to opt for offshore gambling sites that offer higher bonuses and better payouts in casino-and-gambling activities. Additionally, the stricter regulations have caused a decrease in the number of sports betting options available in land-based venues, potentially resulting in a drop in revenue for both the government and the gambling industry in the Netherlands.
