Netherlands: Gambling Tax Hike Misses Revenue Targets Significantly

The Dutch government's gambling tax increase has severely disappointed fiscal expectations. Projections of hundreds of millions in additional revenue have dwindled to a mere fraction. This raises questions about the effectiveness of high taxation in the gambling sector. It demonstrates that a pure tax hike, without considering the overall market, can lead to undesirable side effects. Market analysts speak of an important reality check for European regulators. Important lessons can also be drawn for Germany. The industry must closely monitor this case.

Numbers and facts

The Netherlands increased its gambling tax in two phases: from 30.5% to 34.2% in January 2025, and then to 37.8% in January 2026. The Dutch Treasury expected additional revenues of 108 million Euros in 2025 and 216 million Euros in 2026. The actual figures fell far short of these expectations. In 2025, only 2 million Euros extra were collected. For 2026, an estimated 57 million Euros is projected. Ed Birkin, an analyst, points out that the tax rate alone is not to blame for this deficit. New deposit limits, advertising curbs, and the fading of the post-Euro 2024 revenue spike all played a role in shrinking the taxable base.

Interestingly, land-based venues also suffered. Casino and gaming hall visits were down around 11% year-on-year. Several operators attribute this decline directly to the tax hike, citing it as a factor in closures. Generally, it appears that tax increases do not always achieve the desired effect that governments hope for. There were also some observations regarding World Cup prediction markets. DR Congo was the most backed country not to win the World Cup. France, Spain, and Portugal were the most played favorites.

Background

The discussion about the correct taxation of gambling is a persistent topic in Europe. Many countries are experimenting with different approaches to generate revenue on one hand and ensure player protection on the other. The Dutch case illustrates the complexity of this task. Excessive taxation can lead players to unregulated offerings. This would undermine both player protection and tax revenues.

This aspect was also discussed at the iGB L!VE Africa Summit. Regulators from Nigeria, South Africa, and Kenya met there. Industry bodies such as the African Tax Administration Forum were also present. A key topic was sustainable taxation and the channeling of players into the regulated market. Ed Birkin, who moderated a tax panel at the summit, posed a pointed question:

“If operators in some markets quietly absorb or avoid punitive tax rates, can the industry then still credibly argue against high taxation elsewhere?” - Ed Birkin, Analyst

This question remains relevant for the entire global gambling industry.

In parallel, Ireland has a new licensing regime under the Gaming and Lotteries Regulatory Authority of Ireland (GRAI), which took effect on July 1. Currently, 89% of online betting is with licensed providers. However, the total market share of licensed offerings is only 35%, as all other iGaming remains offshore and unregulated. This highlights that regulation must effectively manage not only taxation but also the channeling of players into the legal market. Platform providers like Pragmatic Solutions have already gone live in Ireland. They support operators through the transition to the regulated market.

Why it matters for German players

The Netherlands case serves as a cautionary tale regarding the potential consequences of suboptimal gambling regulation. In Germany, the State Treaty on Gambling (GlüStV 2021) came into force in 2021. Its aim was to channel the online gambling market and improve player protection. The Joint Gambling Authority of the Federal States (GGL) is responsible for licensing and supervision. These approaches are fundamentally positive. However, there are also restrictions here that could lead to a shift to the black market. For example, the deposit limit of 1,000 Euros per month via the LUGAS system, and the stake limit of 1 Euro per spin for online slot machines. Such restrictions can cause players to switch to unregulated providers. These so-called "grey market" casinos, often with licenses from Malta (MGA) or Curacao, often offer higher stake limits and no LUGAS system. While this may seem more attractive on the surface, it carries significant risks. In case of problems, there is insufficient player protection or legal recourse.

What it means for GGL-licensed casinos

For casinos holding a German GGL license, the developments in the Netherlands are an important signal. The GlüStV 2021 pursues a different approach than the Dutch tax increase. It focuses on player protection and channeling players towards regulated providers. The GGL whitelist is the central instrument here. Players can find casinos there that meet the strict German requirements. The success of German regulation will depend significantly on how well it manages to curb the black market while enabling attractive offers in the regulated sector. Excessive taxation or overly strict requirements, as seen in the Netherlands, could also lead to undesirable effects in Germany. The GGL must therefore carefully balance player protection, the attractiveness of legitimate offerings, and, of course, fiscal objectives. The Dutch case shows that revenue can suffer if the ecosystem is not understood in sufficient detail.