Gamblers will bear the financial burden of a new tax on betting activities – or potentially shifting to unregulated, underground gambling operations to dodge the taxation
In the world of gambling, the Dutch market is grappling with a significant downturn following a tax hike and stricter regulations.
Entain, the owner of Ladbrokes and Coral, will unveil its interim results on Tuesday, while William Hill's parent company Evoke will publish its own interim results on Wednesday. These companies, like many others in the industry, are closely watching the developments in the Dutch market.
The Dutch Gambling Authority (KSA) has voiced concern after conducting an impact assessment of the increase in gambling tax. The tax rate on the sector increased to 34.2 per cent from 30.5 per cent at the start of the year and is set to jump again to 37.8 per cent in January 2026.
The recent increase in gambling taxes, combined with stricter player protection regulations, has led to a significant decline in gross gaming revenue (GGR) and a sharp drop in tax revenues. The government is facing a €200 million shortfall in expected tax revenue for 2025, with total tax revenue down to approximately 83% of the first half of 2024's collection.
The key impacts on the gambling industry include a drop in GGR, operator strain, a shift to illegal gambling, stricter advertising bans and sponsorship cuts, and player protection rules. Higher taxes and added regulatory burden have forced operators to cut costs, including reductions in advertising and payout ratios, affecting their competitiveness. Players have been turning to illegal casinos offering better bonuses and payouts, undermining the goal of safe, regulated gambling environments.
New monthly deposit limits and affordability checks for high depositors increase operational costs and reduce player spending, further depressing revenues. The ban on betting sponsorships in Dutch sports has caused a loss of about €40 million annually in direct club revenue, further impacting the gambling industry's market presence and partnership revenues.
Dutch Gambling Authority (KSA) chairman Michel Groothuizen has acknowledged that the tax hike was "contrary to the policy objective of providing players with more protection," highlighting the unintended consequences of these measures on both player protection goals and fiscal outcomes.
The US gambling market, on the other hand, is mature and one of the most liberalised in the world, with hundreds of brands. Super Group's profit before tax hit $38.8m for the second quarter, while DraftKings, a US rival to Flutter Entertainment's FanDuel, reported records for revenue, net income, and adjusted core earnings for the second quarter.
Former Prime Minister Gordon Brown has called for a hike in gambling taxes to raise £3 billion to lift children out of poverty. In the UK, general betting duty would rise to 25 per cent from 15 per cent, although horseracing would get £100 million in additional support.
The King George prize-money has been boosted, reflecting the need to maintain the relevance of British racing's best events. John Ferguson has stepped down from the BHA board following the news of its transition to a fully independent board. Ferguson was the member-nominated director nominated by the Thoroughbred Breeders' Association, Racehorse Owners Association, and National Trainers Federation.
These developments serve as a reminder of the complex interplay between taxes, regulations, and the gambling industry's health. As governments seek to address social issues and generate revenue, they must be mindful of the potential unintended consequences on the industry and the players they aim to protect.
Sports betting companies in the industry, such as Entain and William Hill, are closely monitoring the developments in the Dutch market, concerned about the significant decline in gross gaming revenue (GGR) and the sharp drop in tax revenues due to the increased gambling tax and stricter regulations. In contrast to the Dutch market, the US gambling market, known for being one of the most liberalized in the world, is flourishing, with record revenues and profits being reported by companies like DraftKings and Super Group. This highlights the importance of balancing tax increases for revenue generation and regulations for player protection, while maintaining a competitive and profitable gambling industry. The complex interplay between taxes, regulations, and the gambling industry's health should be carefully considered by governments, as unintended consequences can impact both the industry and the players they aim to protect.
