Netherlands decides on gambling tax hike to 37.8%

The Dutch government has agreed to introduce a tax hike to see the country levy the gambling industry with a 37.8% tax, up from the current 30.5%.

To avoid the smooth transition, Dutch lawmakers have agreed to a smooth transition towards the tax target over the course of the next years, with 34.2% rolled out in 2025, and the 37.8% tax introduced finally in 2026.

Gambling tax in the Netherlands to hit 37.8%

Thanks to the grace period, businesses will have time to adjust their operations to meet the new tax target and make the necessary amendments.

In the meantime, the government has said that maintaining "healthy public finances" was its main priority, and the increase in gambling was not frivolous but aligned with this overall strategy for achieving this.

However, the government is willing to offer a tit-for-tat. By introducing the 37.8% levy, the government is discontinuing the tax on customer winnings, which brought €450m in revenue, which will now be made up directly out of the operators’ bottom line instead.

Although it makes sense on paper, the tax could have potentially significant ramifications on gambling businesses and ecosystems. For example, the Netherlands Olympic Committee expressed concerns that heavier taxing of gambling companies could impact the funds going to professional and amateur sports.

Nederlandse Loterij has similarly called on the government to act more cautiously and tax products such as slots at a higher rate than lotteries, which it considers to be a much safer form of gambling entertainment. In the meantime, industry groups have been mostly pessimistic.

NOGA interim General Secretary Eric Konnings has noted that the government’s concession to introduce the tax in tiers was partially a sign that the industry would suffer if it were to absorb the full levy from the beginning. In this regard, Konnings argued, the government has done due diligence.

Ramifications of Dutch gambling tax unknown

Yet, the issue remains that the impact of the new gambling tax rate has not been properly gauged according to him. In the meantime, the Netherlands gambling operators would have to comply with a new mandatory deposit limit which will kick in on October 1 and force companies to perform financial checks on anyone who deposits more than €350 and is aged at least 25.

The amounts have been changed since the country regulator’s officially published recommendations in June this year.

Younger customers, those who are not yet 25 years of age, will have to face the same checks for anything exceeding €150. This will additionally compound operations and make the process of running a business more cost-heavy.

Some companies will remain and battle it out, as the Netherlands is one of the most important markets in Europe, but Flutter Entertainment, which recently made a $350m foray into the Brazilian market has said that its Tomobola brand is leaving the jurisdiction.

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