Dutch gambling regulator sounds alarm over impact of tax hike

The Dutch Gambling Authority (Kansspelautoriteit, or KSA) has issued a warning that a recent increase in gambling taxes has backfired, weakening the country’s legal gambling sector instead of bolstering public revenue.

Since January 1, 2025, the gambling tax rate rose from 30.5% to 34.2%. According to KSA chairman Michel Groothuizen, this move has led to lower tax revenue and increased pressure on licensed operators.

“The increase in the gambling tax means that gambling providers must take measures to maintain their profitability,” he said. “This can be done in various ways, for example, by reducing costs or increasing income. In the country-specific part of the market, the possibilities for this are limited.”

Land-based gambling operators have been hit hardest. According to the KSA, the number of physical gambling venues in the Netherlands fell by 9% in Q1 2025 compared to the previous quarter, outpacing the annual decline rate of 6% observed between 2020 and 2025.

“A financially driven measure, such as a gambling tax, is at odds with the policy objective of offering players more protection,” said Groothuizen. “If we want to be able to offer players a protected gaming environment in the future, this presupposes serious, responsible providers. A financially healthy legal market is essential for this.”

Although both online and offline sectors are experiencing declining revenues, the KSA noted that online operators may have slightly more flexibility to adapt. Online businesses can adjust payout percentages and cut costs more easily, whereas land-based venues face greater operational constraints.

However, the online market is also under pressure due to stricter responsible gaming regulations. These include new affordability checks and spending limits introduced under the 2024 Policy Rule on Responsible Gaming.

Groothuizen noted that the KSA had expressed concerns about the tax hike’s impact prior to its implementation. “The KSA has already indicated before the introduction of the increase in the gambling tax that this would be the effect," he said.

The regulator’s warning comes amid growing concern across the sector. Speaking at an international conference, Peter-Paul de Goeij, founder of the Netherlands Online Gambling Association (NOGA), described the rising tax burden as “death by taxes” and criticized what he called “well-intentioned but poorly executed policies.” He warned of a growing shift toward unlicensed gambling platforms.

“Deposit limits have triggered the migration to illegal markets,” de Goeij said, citing data that shows only 49% of online gambling revenue in the Netherlands is now flowing through licensed operators.

Echoing these concerns, Pontus Lindwall, CEO of Swedish gambling firm Betsson, emphasized the consumer safety risks posed by a shrinking legal market. “Regulation isn’t for the benefit of operators. It’s for protecting consumers, and failing to protect 50% is a failure," he stated.

The KSA concluded by reaffirming its commitment to monitoring the balance between fiscal goals and the sustainability of the legal market. “The KSA keeps a close eye on developments in the field of channelling online supply and the decline in the number of branches of the land-based supply,” the authority stated.

Meanwhile, taxes are set to rise again, reaching nearly 38% by the end of the year, raising even more concern across the industry.