The Netherlands’ aggressive gambling tax increases have dramatically underperformed, with actual revenue gains falling to just a fraction of Treasury forecasts as market contraction and operational pressures squeezed the tax base from multiple angles.

Forecasts Meet Reality

A joint monitoring report from the Ministry of Finance and regulator Kansspelautoriteit (KSA) reveals the scale of the shortfall. The government had predicted the two-phase tax increase, which lifted rates from 30.5% to 37.8% between January 2025 and January 2026, would generate approximately €108 million in additional revenue during 2025 and a further €216 million in 2026.

Reality looked starkly different. Additional revenue amounted to roughly €2 million in 2025 and an estimated €57 million in 2026, relative to 2024 baselines. That’s less than 2% and 26% of projections respectively.

A Shrinking Tax Base

The real problem? The taxable foundation itself has eroded. Gambling tax is calculated on gross gaming revenue (GGR), and multiple forces have hammered this base simultaneously. Regulatory harm-reduction measures, while serving important player protection objectives, directly compressed gambling volumes. At the same time, land-based operators have restructured or shuttered venues, with many openly citing the tax increase as a margin-squeezing factor.

Market share for licensed operators has contracted noticeably. Casino and gaming hall visits declined by approximately 11% year-on-year from the first quarter of 2025 to the same period in 2026, according to KSA’s 2025 annual report. Gaming hall numbers continued their downward slide.

State Operators Bear the Weight

State-controlled entities Holland Casino and Nederlandse Loterij have taken significant hits. Holland Casino faced profit reductions of around €27 million in 2025 and €54 million in 2026 directly attributable to the tax increase. Nederlandse Loterij projected reductions in corporate tax, statutory levies and profits totalling approximately €16 million in 2025 and €34 million in 2026.

These losses partially offset the additional gambling tax collected, further dampening any net fiscal benefit from the reform.

Charitable Contributions Hold Steady

One bright spot: charitable and sporting contributions from licensed operators remained largely stable. Charitable payments increased modestly by 1.8% between 2024 and 2025, whilst sporting contributions dipped 3.6%. The report found no robust evidence that the initial tax rise materially disrupted charitable giving patterns.

The experience underscores a familiar regulatory challenge, frankly. Tax rates calibrated without full accounting for market elasticity and operator response can backfire spectacularly on revenue assumptions, particularly in sectors where licensed competitors face real cost pressures relative to unlicensed alternatives.

What the team thinks

Baz Hartley says:

Philippa’s got the numbers spot on, and this is precisely what happens when governments treat operators like cash machines rather than businesses with actual operating costs and margin requirements. The Dutch case is a textbook example of taxation policy working against itself, and I’d argue the real story here isn’t just the revenue miss, but what it reveals about player migration and the underground market’s resurgence, which Treasury forecasters consistently underestimate. If regulators want sustainable tax revenue, they need to work with operators on realistic rate structures rather than hoping aggressive levies will magically increase compliance, because spoiler alert, they don’t.