Dutch Gambling Tax Hike Backfires

The Dutch government faces a significant shortfall in gambling tax revenue, with new figures indicating a €200 million gap compared to last year. The decline follows a controversial gambling tax hike introduced in January, which raised the rate to 34.2% of gross gaming revenue (GGR) and was intended to boost state income.

According to reporting by Financieele Dagblad, data from trade body VNLOK (Licensed Dutch Online Gambling Providers) show that GGR in the first half of 2025 has dropped by 25% year-on-year. This has translated into a corresponding dip in tax revenue, with the Netherlands Gambling Authority (KSA) expected to report collections at just 83% of the same period in 2024.

 

• €200 Million Shortfall: The Dutch government is set to miss its gambling tax revenue target by over €200 million in 2025, despite a tax hike to 34.2% of GGR.

• Legal Market Decline: Gross gaming revenue dropped 25% year-on-year, driven by strict regulations, deposit limits, and increased competition from unlicensed operators.

• Channelisation Rate Drops: Only 50% of gambling now occurs through legal channels, as higher-value players shift to the black market to bypass new restrictions.

 

The Developments

The Ministry of Finance had forecast an annual increase of €200 million in gambling tax receipts between 2025 and 2028, following the phased tax hike. However, early figures—expected to be confirmed this week by the KSA’s impact assessment—suggest that the new policy is underdelivering and may have exacerbated the very issues it aimed to solve.

The fall in revenue coincides with a series of increasingly restrictive regulatory measures introduced over the past year. These include a ban on untargeted advertising and sponsorships, stricter deposit limits, and the first stage of the tax hike. VNLOK has warned that such interventions are pushing consumers toward unlicensed operators that fall outside the KSA’s jurisdiction.

In its spring report, the KSA noted that the second half of 2024 saw a 10% drop in GGR from the first half, pointing to the October implementation of player protection rules—such as the €700 monthly deposit limit (€300 for those under 25)—as a primary cause. The legal market’s “channelisation rate” (i.e., the share of gambling occurring through licensed operators) has since fallen from 58% to 50%.

Despite this, the number of registered player accounts has slightly increased to 1.19 million. The KSA attributes this to high-value players migrating to illegal platforms in order to bypass new deposit restrictions, suggesting that the legal market is losing its most lucrative clientele.

Industry Groups Call Policy “Counterproductive”

Critics of the tax policy have seized on the new data to highlight its negative consequences. Brancheorganisatie VAN Kansspelen, another industry trade body, described the tax hike on LinkedIn as “doubly unwise,” arguing it is “ineffective, inefficient, and even completely counterproductive—both in terms of the budget and with regard to gambling policy objectives.”

The phased tax increase is set to continue, with a further jump to 37.8% of GGR scheduled for January 2026. This will apply across all gambling sectors, from online platforms to physical casinos and lotteries.

This policy direction was pursued despite warnings from Atlas Research, which last year conducted a government-commissioned study indicating that higher taxes could force operators to reduce services or exit the Dutch market entirely. The report predicted that such moves could lead to greater black market activity as licensed firms pass on higher costs to players or cease operations.

 

The increase is ineffective, inefficient and even completely counterproductive, both in terms of the budget and with regard to gambling policy objectives.

 

Conclusion

The Dutch government’s efforts to tighten control over the gambling sector and increase tax revenue appear to have had unintended consequences. A shrinking legal market, lower-than-expected revenues, and growing black market activity now threaten the policy’s original aims. With a further tax hike on the horizon, pressure is mounting on policymakers to reassess the balance between regulation, taxation, and market sustainability.