• The Dutch gambling regulator, the KSA, has issued a stark warning that a recent tax hike from 30.5% to 34.2% is damaging the legal market and has led to a decrease in tax revenue.
• KSA Chairman Michel Groothuizen stated the measure has put licensed operators under severe financial pressure, particularly in the land-based sector which saw a 9% drop in venues in Q1.
• The regulator argued that a “financially healthy legal market is essential” for player protection and that the current fiscal policy is now at odds with this primary objective.
• Industry leaders have echoed these concerns, with one prominent association warning of “death by taxes” and poor channelisation rates to the legal market.
• The KSA confirmed it had warned the government of these negative effects before the tax increase was implemented, suggesting the current market strain was a foreseeable outcome.

In a rare and pointed critique of government policy, the Netherlands’ gambling authority, the Kansspelautoriteit (KSA), has stated that the recent increase in the country’s gambling tax rate has been counterproductive, leading to lower state revenues and weakening the regulated sector.

Effective from 1st January 2025, the tax on gambling was raised from 30.5% to 34.2%. However, according to the KSA’s own analysis, the policy has failed to achieve its fiscal goals.

“The revenue from gambling tax has decreased,” KSA Chairman Michel Groothuizen commented in an official statement. He attributed this to the financial pressure placed on licensed providers, which has been compounded by other stringent player protection measures. “This has led to a decrease in the gross gaming result for the entire market.”

A Financially Unhealthy Market Undermines Player Protection

The KSA’s primary concern is that the tax hike is undermining the core objective of the regulated market: player protection. Groothuizen argued that a financially viable legal market is a prerequisite for ensuring high standards of compliance and responsible gaming.

“A financially driven measure such as gambling tax is at odds with the policy objective of offering players more protection,” he said. “If we want to be able to offer players a protected gaming environment in the future, this presupposes serious responsible providers. A financially healthy legal market is essential for this.”

The strain is particularly evident in the land-based sector. The KSA noted that the number of physical gambling venues in the Netherlands fell by 9% in the first quarter of 2025 alone, a much faster rate of decline than the historical average.

Industry Echoes Regulator’s Concerns

The KSA’s position is strongly supported by industry stakeholders. At a recent conference, Peter-Paul de Goeij of the Netherlands Online Gambling Association (NOGA) described the situation as “death by taxes,” warning that the combination of high taxes and restrictive measures on legal operators was pushing consumers to the black market.

This sentiment was echoed by Pontus Lindwall, CEO of Betsson, who noted that low channelisation represents a failure of the regulatory system. “Regulation isn’t for the benefit of operators. It’s for protecting consumers, and failing to protect 50% is a failure,” Lindwall stated, referencing reports of poor channelisation in the Dutch online market.

A Problem Foretold

Crucially, the KSA made it clear that these negative consequences were predictable. “The KSA has already indicated before the introduction of the increase in the gambling tax that this would be the effect,” the regulator’s statement read. This suggests the government was warned that its fiscal policy could harm the regulated market’s sustainability.

The KSA has vowed to continue monitoring channelisation rates and the financial health of the sector. The situation in the Netherlands now serves as a critical case study for European jurisdictions on the potential dangers of implementing punitive tax rates that risk the viability of the very legal market they are intended to fund.