A significant increase in Dutch gambling taxes generated only €2 million in additional revenue during 2025, dramatically missing the government's original target of €108 million and raising fresh questions about the effectiveness of higher taxation in regulated gambling markets.

The findings were published in a joint monitoring report by the Dutch Ministry of Finance and gambling regulator Kansspelautoriteit (KSA), which examined the impact of tax increases introduced across the gambling sector between 2025 and 2026.

Tax increase delivers fraction of expected returns

The Netherlands increased its gambling tax rate from 30.5% to 34.2% on 1 January 2025, followed by a second increase to 37.8% on 1 January 2026.

At the time, policymakers projected that the higher rates would generate an additional €108 million in tax revenue during 2025 and €216 million in 2026.

Instead, gambling tax receipts rose only marginally from €1.034 billion in 2024 to €1.036 billion in 2025, resulting in just €2 million of additional revenue.

Officials now estimate that 2026 tax receipts will be only €57 million higher than 2024 levels, significantly below the original forecast.

According to the report, the expected gains from higher tax rates were largely offset by a decline in the underlying tax base.

Shrinking gambling activity undermines tax revenues

The report concluded that although it is difficult to isolate the precise impact of the tax increases, a reduction in taxable gambling activity played a major role in the revenue shortfall.

Several factors contributed to the shrinking tax base, including:

- New affordability measures introduced in October 2024

- Deposit limits of €300 for younger adults and €700 for players aged 24 and over

- Restrictions on gambling advertising and sponsorship

- Increased regulatory oversight

- Market normalisation following major sporting events such as Euro 2024

These measures successfully reduced gambling activity in some areas but also reduced the amount of taxable gross gaming revenue (GGR) generated by operators.

The Ministry of Finance acknowledged that higher tax rates may themselves have contributed to lower gambling volumes, although the exact extent remains unclear.

Land-based sector faces growing pressure

The report also highlighted ongoing difficulties within the Dutch land-based gambling sector.

Visits to casinos and gaming halls declined from 4.6 million during the first quarter of 2025 to 4.1 million during the same period in 2026, representing an 11% year-on-year decrease.

Several operators have reduced their retail footprint in recent years.

Both JVH Gaming and Fair Play Casino have publicly linked venue closures to the increasing tax burden, although regulators noted that the sector was already facing several structural challenges, including:

- The long-term effects of the Covid-19 pandemic

- The introduction of the Cruks self-exclusion system

- Competition from regulated online gambling

- Rising operational costs

As a result, the report stated that it is impossible to determine precisely how much of the decline can be directly attributed to higher gambling taxes.

State-owned operators also affected

The tax increases have also impacted government-owned gambling businesses.

Holland Casino reportedly expects profit reductions of approximately €27 million in 2025 and €54 million in 2026 as a result of the higher tax rates.

Meanwhile, Nederlandse Loterij anticipates a reduction of approximately €16 million in 2025 and €34 million in 2026 through lower profits, reduced corporate tax payments and smaller statutory contributions.

The report notes that these losses partially offset the additional gambling tax revenue collected by the state.

As a result, the overall benefit to public finances may be substantially lower than headline gambling tax receipts suggest.

Online market remains resilient

Despite industry concerns, the report found no clear evidence that the tax increases have significantly damaged the regulated online gambling market.

Online gross gaming revenue remained relatively stable throughout the review period, while the number of licensed operators continued to grow.

However, regulators acknowledged that it remains difficult to separate the effects of taxation from other regulatory developments, including advertising restrictions and affordability measures.

Recent KSA market data has also indicated a slight decline in the market share of licensed operators, raising ongoing questions about channelisation and competition from unlicensed providers.

Industry criticism intensifies

The findings are likely to strengthen criticism from operators and industry associations that opposed the tax increases.

Dutch Lottery CEO Arjan Blok recently warned that higher gambling taxes could accelerate migration to the black market while reducing funding for sports and charitable causes.

Trade association VNLOK has similarly argued that increasing taxes on licensed operators risks becoming counterproductive if it weakens the regulated market and pushes players towards unlicensed alternatives.

The report itself stops short of drawing that conclusion but acknowledges that higher taxes, combined with tighter regulation, have significantly reshaped the Dutch gambling landscape.

Lessons for European regulators

The Dutch experience is increasingly being viewed as a case study for other European jurisdictions considering gambling tax increases.

While policymakers sought to increase public revenues without significantly affecting market activity, the report suggests that gambling taxation may have practical limits when combined with stricter consumer protection measures and advertising restrictions.

The findings highlight the challenge regulators face in balancing tax collection, player protection and channelisation objectives within increasingly mature regulated markets.

Sources: IGB, Next.io