Dutch Gambling Tax Increase Provides Warning for Other Countries
The Netherlands Gambling Authority (Kansspelautoriteit or KSA) has provided a cautionary tale to other countries and jurisdictions that may be considering increasing their gambling taxes. It confirmed on August 5 that the country’s recent gambling tax increase to 34.2% has not achieved its intended goal of generating higher government revenue.
LISTEN TO THIS ARTICLE:According to the regulator, an impact assessment conducted after the implementation of the tax hike on January 1, 2025, revealed that gross gaming revenue (GGR) has declined across both the online and land-based gambling sectors, resulting in lower overall tax collections.
Related: Betsson Rejects Dutch iGaming Market Return amid Regulatory Government ChallengesThis assessment aligns with data released earlier in the week by VNLOK, the national online gambling trade association. The group reported that tax revenue collected so far in 2025 is only 83% of what was generated during the same period in 2024.
The organization attributed the shortfall to a combination of increased taxation and new player protection rules, which have made the regulated market less appealing to consumers. As a result, many players appear to be shifting to unlicensed operators, often referred to as the black market.
KSA Chair Michel Groothuizen stated that recent measures aimed at enhancing player protection have made operations more financially challenging for legal gambling providers. This has resulted in a decline in overall market GGR, which in turn has reduced tax revenues.
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KSA Predicted the Drop in Revenue
Groothuizen emphasized that the Kansspelautoriteit had previously warned of this potential outcome before the tax increase was enacted. He noted that when gambling tax is used as a tool for revenue generation without considering its broader effects, it may conflict with the core objective of player protection. A sustainable legal market, he added, relies on serious and responsible operators who must remain financially viable to ensure a safe and controlled gambling environment.
The regulatory body further indicated that retail operators are facing more pronounced consequences due to limited flexibility in offsetting the impact of the tax hike. Unlike their online counterparts, physical venues have fewer options for reducing operational costs or adjusting payout structures. As a result, the number of retail gambling outlets dropped by 9% in the first quarter of 2025, a sharper decline compared to the 6% average reduction recorded annually over the past five years.
Although the online gambling segment is also experiencing a decrease in tax revenue, it appears to be better positioned to absorb the effects of the changes. The KSA noted that online operators have greater capacity to make adjustments, such as altering payout rates and optimizing expenses, which can help them manage the financial pressure caused by higher tax obligations and stricter regulatory requirements.
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