Dutch gambling regulator Kansspelautoriteit (KSA) has accused the government of putting player protection at risk after publishing figures that show gambling tax receipts are set to fall by 5% following the recent rate hike.
The rate increased from 30.5% of GGR to 34.2% on 1 January 2025 and will rise again to 37.8% at the start of 2026.
The KSA’s impact assessment of the rate increase since the start of the year shows that gambling tax revenue in 2025 will be approximately €40 million (5%) lower than in 2024. The government had sought to raise €100m more in 2025 and an additional €200m from 2026.
Having opposed the tax hike since before its implementation, the KSA’s assessment illustrated how the squeeze on operators is leading them to make business decisions that are less appealing to players.
The tax rise, in tandem with other restrictive regulations – such as deposit limits – is therefore a boon to the unlicensed market.
Michel Groothuizen, chairman of the KSA, said of the findings: “The measures we have taken to offer players more protection have made it financially more difficult for providers. This has led to a decrease in the GGR for the entire market.
“Consequently, gambling tax revenues have also decreased. The KSA had already indicated this would be the effect before the increase in gambling tax was implemented.”
He insisted financially driven decisions, like the gambling tax hike, are at odds with player protection efforts.
“If we want to offer players a protected gaming environment in the future, this requires serious, responsible providers. A financially sound, legal market is essential for this,” he said.
How has the gambling tax change impacted operators?
For online gaming, GGR was 8% lower in Q1 2025 compared to Q4 2024, according to the KSA’s assessment. In Q2 2025, GGR remained roughly the same. The reduction in GGR is partly due to the introduction of stricter player protection rules in October 2024, the KSA said.
This suggests players are gambling less or losing less money. After taxes, operators are left with 12% less to cover costs.
Within land-based casinos and arcades, GGR in Q1 2025 was 4% lower than in the fourth quarter of 2024. In the second quarter, the GGR remained roughly the same.
After paying taxes, operators are left with 10% less to cover their costs. With operators attempting to maintain profitability, KSA data shows that the number of locations in Q1 2025 was 9% lower than in Q4 2024.
While GGR remained around the same in Q2 for operators, net gaming revenue (NGR) was impacted. Online and land-based gambling operators saw NGR fall by 8% and 10% per month, respectively.
KSA figures show that an operator would make a profit of €36,450 on GGR of €1 million under the previous tax regime. That figure falls to €6,480 under the current rate and a loss of €28,000 when the 2026 rate is imposed.
Netherlands tax hike could indirectly impact channelisation
The KSA warned operators’ attempts at absorbing this tax increase – reducing player payouts, adjusting bonus structures, cutting back on marketing, or exiting the market altogether – would boost the black market. In Q1 2025, 91% of players used legal websites exclusively. In terms of GGR, legal platforms accounted for just 51% in the first four months of 2025.
The assessment concluded: “The gambling tax increase has had no direct impact on channelisation, but may eventually cause some players to turn to illegal operators if legal operators reduce payout percentages or limit their offerings.”
The KSA’s spring report in April revealed that H2 2024 gross gaming revenue was 10% lower than in the first half of the year, with October’s implementation of new protection measures playing a key role in the drop.
Since 1 October, players have been prohibited from depositing more than €700 (£601.28/$796.24) in a single calendar month. The limit dropped to €300 for those aged between 18 and 25.
The combination of the new measures and a different methodology led the KSA to estimate the channelisation rate for legal operators, based on GGR, was 58% in H1 of 2024. This then dropped to just 50% in the second half of the year.
But the average number of player accounts remained relatively stable, edging up to 1.19 million from 1.1 million six months earlier. This, the KSA said, was due to higher-value players having switched their focus to illegal offerings. This was in order to bypass the deposit limits.
Taking to LinkedIn on Monday, trade body Brancheorganisatie VAN Kansspelen said the gambling tax data showed the rate increase was “doubly unwise”.
The body added: “[The] increase is ineffective, inefficient and even completely counterproductive, both in terms of the budget and with regard to gambling policy objectives.”
KSA figures show that Dutch online operators are left with 12% less to cover costs since January’s tax hike.