Silvio Erkens, MP for the People’s Party for Freedom and Democracy, and Chris Stoffer, MP for the Reformed Political Party came up with a suggestion that gambling taxes should be increased. If accepted, the proposal would result in amendments to Article 5, paragraph 1 of the Netherlands’ Gambling Tax Act, establishing a tax for operators of 30.5%.
The amendment was submitted on October 24, 2023, and the government was urged to apply in by 2025. As explained, one of the main reasons for this proposal is the fact that the huge popularity of online gambling has brought a notable growth in the turnover of online gambling companies.
Taxes on Alcohol and Tobacco to Go Up as Well
The suggested increase in gambling tax in the Netherlands is in connection with the proposal involving a 16.2% excise duty increase on alcohol plus a bigger excise duty on tobacco.
However, MPs clarify that their suggestion for higher taxes should encompass online gambling only, not the alcohol sector. Unfortunately, this is not possible as gambling tax does not currently differ depending on the gaming types.
According to their estimations, the increase in alcohol excise duty will cost €74m (£64.5m/$78.2m) and it will have a huge impact on the small businesses and their employees. They also add that the rise in gambling tax would cover €26m of the total alcohol tax increase cost, whereas tobacco would make up the remaining €48m.
The amendment explains:
“Once that is the case, the additional revenue from the increase in gambling tax as a result of this amendment can be found by taxing online gambling companies more heavily, to the extent that the increase can be reversed for all other taxpayers.”
This proposal is expected to come into effect from January 1, 2024.
Slowdown in Market Growth
As a small reminder, after the much-delayed Remote Gambling Act (KOA) was passed and enacted, marking the official launch of the Dutch iGaming market in October 2021.
In a report published earlier in October, the regulator Kanspelautoriteit (KSA) has reported a general slowdown in market growth.
Compared with the previous year’s data, when the growth amounted to 33%, data from January to August 2023 show that gross gambling revenue (GGR) grew only 8%. One of the reasons for the revenue decline is the ban on gambling advertising.
Also, the number of active accounts fell by 4%, but this number is not to be taken as an estimate of overall number of consumers, as they often use multiple accounts. On the other hand, KSA chairman René Jansen, who will step down after his current term expires, has no concerns about the future of the Dutch iGaming market, adding that it is “developing as expected”.
Cashback Bonuses Under Scrutiny
In September this year, KSA initiated an investigation involving cashback bonuses and their impact on responsible gambling practices. Although this type of offer sees players receiving a percentage of their losses back, they lead to riskier gambling habits, such as playing more frequently or with higher stakes.
The first actions against cashback bonuses were taken approximately a year ago, in November 2022, when operators were ordered to stop offering such incentives. Operators found in breach of this rule faced enforcement actions by the local regulator.
“Dutch MPs propose increased gambling tax”, igamingbusiness.com, October 25, 2023.