Dutch Government Introduces Temporary Gambling Tax Hike

The multiple delays in the introduction of the Netherlands’ new gambling regulatory framework have taken their toll, as the Dutch government announced earlier this week plans to implement a temporary rise in the current gambling tax rate.

Regulated gambling operators currently pay a 29% tax. Under the recently emerged proposal, the current tax rate will be increased by 1.1% to 30.1%. Dutch lawmakers pointed out that the rate will be reduced to 29% six months after a long-delayed gambling bill is finally signed into law. They further explained that the six-month window will allow the Dutch Gaming Authority to make the necessary adjustments arising from the introduction of the new gambling law.

The proposal surfaced earlier this week as part of the Dutch government’s budget plan for the upcoming year. Dutch lawmakers pointed out that the above-mentioned gambling bill will finally be implemented on July 1, 2018. If this happens, this would mean that the old gaming tax rate will be re-introduced on January 1, 2019.

After news about the tax increase proposal spread, analysts and insiders expressed surprise that it is the industry that will suffer from the multiple delays in the implementation in the bill. However, it is important to note that those multiple delays were caused by political uncertainty and lack of accord on the bill’s provisions.

Generally speaking, the discussed legislative piece will open the Dutch online gambling market to international operators. Demand for iGaming services has always been high among Dutch players and due to the lack of proper regulations, companies have been able to operate in a gray area.

Tightened Regulations and the Industry’s Response

Earlier this year, the Dutch Gaming Authority, Kansspelautoriteit, introduced new rules to the way iGaming services are provided in the country’s unregulated environment. The regulatory body thus made it much harder for operators and their affiliate partners to target Dutch players.

Kansspelautoriteit’s tighter rules were justified by the regulator as ones that aimed to present more clarity and emphasis on its negative stance on the provision of unlicensed services to Dutch customers. They also signaled that changes in the country’s gambling environment could eventually be adopted.

Last summer, the Dutch House passed the above-discussed iGaming bill and send it to the Senate for consideration. Hopes were for quick implementation of the legislative piece, but those hopes were not fulfilled.

Kansspelautoriteit’s new set of rules was highly contested by industry stakeholders with Malta-based online gambling operator Betsson being among the most vocal opponents. The gambling group sought court ruling on the matter, but a Hague court ruled in favor of the Dutch gambling regulator earlier this month. The court decided against Betsson’s claim that Kansspelautoriteit’s new rules violated EU regulations and limited interested operators in freely distribute their services within the union’s borders.

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