The Netherlands has a problem. After pushing gambling taxes from 30.5% to 37.8% in just over a year, the government is now collecting less money than before. Industry figures show tax revenue dropped by €43.5 million in 2025, and the regulated market is haemorrhaging players to unlicensed sites.

The Netherlands Online Gambling Association (VNLOK) and state-backed Nederlandse Loterij have sent a joint letter to parliamentary finance committee members, spelling out what many predicted would happen. Total gambling tax revenue fell from around €322 million in 2024 to approximately €288 million in 2025, according to VNLOK’s monitoring of its members.

When Tax Goes Up, Players Go Elsewhere

The Dutch government implemented two tax increases in quick succession. The gross gaming revenue levy jumped to 34.2% in January 2025, then climbed again to 37.8% in January 2026. The stated aim was boosting public coffers.

The actual result? A shift toward black market operators.

During the first half of 2025, illegal online gambling sites took in €617 million. Licensed operators pulled in €600 million. That’s a real problem. Unlicensed platforms pay no Dutch tax and offer zero consumer protection. Players chasing better odds or higher bonuses have simply moved offshore, taking their money with them.

Even the Kansspelautoriteit, the Dutch gambling regulator, has acknowledged the tax increases haven’t delivered expected returns. Licensed operators responded to the higher burden by tightening margins, which suppressed overall sector revenue. Predictably.

Sports Funding Takes a Hit

The damage extends beyond government revenue. Dutch gambling taxes help fund sports organizations and charitable causes. Industry groups estimate that each percentage point increase costs sports bodies around €2.5 million. The cumulative impact is already projected between €12.5 million and €15 million.

That’s money that would have gone to grassroots programmes, facilities, and community initiatives. Instead, it’s flowing to operators based in jurisdictions with lighter regulation and no social contribution requirements. None whatsoever.

Call for Policy Review

The industry letter calls for a formal government evaluation of the tax changes, with findings presented to parliament by Q2 2026. Stakeholders want future policy to account for how tax levels influence illegal gambling, consumer protection standards, and public funding streams.

Parliament is scheduled to discuss gambling taxation in mid-March. Whether lawmakers will reverse course remains uncertain, but the current trajectory is unsustainable. Higher taxes have achieved the opposite of their intended effect, shrinking the regulated market while strengthening unlicensed competitors.

The Netherlands built a regulated online gambling framework to bring operators into the light, protect consumers, and generate public revenue. Pricing licensed operators out of competitiveness defeats all three objectives. If the goal is maximizing tax income, frankly, the evidence suggests a different approach is needed.

What the team thinks

Carl Mitchell says:

Classic case of treasury bean counters ignoring the realities of the modern gambling market. When you’re competing with offshore sites that are just a click away, you can’t price yourself out of the game and expect players to stick around out of loyalty. The Dutch government needs to understand that a regulated market only works when it’s competitive enough to keep punters on licensed sites, otherwise you lose both the tax revenue and the player protections that regulation is supposed to provide.