The Dutch State Secretary for Taxation, Eugène Heijnen, has declared that the government will not be implementing new measures to counteract an anticipated decline in online gambling revenue, even after recent tax increases. In a parliamentary session held last week, Heijnen made it clear that there are currently no plans to modify the existing tax strategy. He emphasized that the tax revenue from gambling is projected to be in line with the forecasts by the Dutch Gaming Authority (KSA) as detailed in their latest report.
Heijnen acknowledged, “It is true that the estimate for revenue has been revised downwards this year,” reflecting the changing landscape of the gambling market. He reassured parliament that this adjustment aligns with the expectations communicated by the KSA. This statement comes on the heels of an August report by Kansspelautoriteit (KSA), which forecasted a significant decline in online gambling revenue as a direct result of the recent tax hike in the Netherlands.
The KSA’s report estimated that the new tax policy would result in a €40 million ($47 million) shortfall in revenue, diverging sharply from earlier predictions that had anticipated a €100 million increase in gross gaming revenue (GGR) for 2025. This revenue decline is largely attributed to a two-phase implementation of the new gambling tax. The first phase, effective from January 1, 2025, increased the tax rate from 30.5% to 34.2% of GGR. The second phase, scheduled for January 1, 2026, will further elevate the rate to 37.8%.
The recent restrictive measures have been identified as key factors contributing to the shortfall. According to a report released last month by the Licensed Dutch Online Gambling Providers (VNLOK), the increased tax rate is expected to lead to a substantial decrease in tax revenue, potentially resulting in a €200 million shortfall for 2025. VNLOK’s analysis projects that gross gaming revenue for the first half of 2025 will decline by 25% compared to the previous year.
VNLOK attributed this projected decline to a series of new restrictive measures implemented over the past year. These measures include bans on untargeted advertising and sponsorships, new deposit limits, and the heightened tax burden. The group has strongly urged the government to reconsider the current tax framework in light of these findings.
Despite these concerns, the Ministry of Finance had initially anticipated an annual increase of €200 million in gambling tax revenue between 2025 and 2028, thanks to the tax hikes. However, the current data suggests a different outcome. During the brief parliamentary discussion, Heijnen conceded that tax revenue from gambling, particularly in the online sector, is not meeting expectations. He attributed this shortfall to increasingly stringent regulations but emphasized that there will be no amendments to existing laws in response to this situation.
“In accordance with budgetary rules, windfalls and shortfalls in tax revenue are reflected in the balance after policy is adopted,” Heijnen explained. “Therefore, the revenue shortfall from this perspective is not a compensatory policy.” This stance highlights the government’s commitment to adhering to its fiscal framework, despite the potential economic implications.
Heijnen’s recent assumption of his role in early September, succeeding Tjebbe Van Oostenbruggen, was amidst a wave of notable governmental departures. These included the resignation of Gambling Minister Teun Struycken and Foreign Minister Caspar Veldkamp. Veldkamp stepped down over the controversial decision to block sanctions against Israel amid the ongoing conflict in Palestine.
While the Dutch government’s stance on the gambling tax policy remains firm, there are those who argue for a more flexible approach. Critics suggest that a reassessment of the tax structure could mitigate the negative impact on revenue and help sustain the industry. However, the government’s position appears resolute, focusing on the long-term benefits of the regulatory measures despite short-term financial setbacks.
This situation reflects a broader trend in the European gambling market, where several countries are grappling with balancing regulation and revenue. The Dutch experience could serve as a case study for other nations facing similar challenges. Yet, some industry experts caution that without adjustments, the Dutch market may experience decreased competitiveness, potentially pushing players towards less regulated international platforms.
The debate about the appropriate level of taxation and regulation in the gambling sector is ongoing, with economic and social considerations at its core. As the Netherlands navigates these complex waters, it remains to be seen how the interplay between policy and market dynamics will unfold in the coming years.
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