The Dutch Gambling Authority (Kansspelautoriteit or KSA) has reported significant growth in the regulated gambling market, with the market’s gross gaming revenue (GGR) increasing by 21.2% in 2023, reaching €4 billion. However, the KSA has also raised concerns regarding the country’s channelisation rate, which measures the proportion of gambling activity conducted through legal operators. While some estimates put the rate as high as 95%, other data suggests it may be closer to 87% due to higher player spend on illegal sites.
Conflicting Channelisation Data
Two new reports released by the KSA on October 10, 2024, provide detailed insights into the current state of the Dutch gambling market. The Autumn 2024 Monitoring Report, which relies on data from research firms GfK and H2 Capital, estimates that the channelisation rate ranges between 87% and 95%, surpassing the initial target of 80% set in 2021.
According to GfK data, 95% of players only visited legal gambling sites during the first half of 2024. However, a second analysis, which considers revenue and player spend across both legal and illegal platforms, suggests the channelisation rate is closer to 87%. This method accounts for the fact that players tend to wager and lose more money on illegal gambling sites, which remain attractive due to the lack of regulatory oversight.
KSA Chairman Michel Groothuizen commented on the findings, saying, “The stricter we regulate, the greater that difference can become.” He added that while the 95% channelisation rate is commendable, the issue of illegal gambling remains a concern as it often involves higher player spending.
Market Growth and Player Behaviour
The KSA’s Market Scan 2024 report shows that the Dutch gambling market has continued to expand, particularly in the online casino sector. Online casino games, including table games and slots, accounted for 27.25% of the total GGR in 2023, generating €1.09 billion. This represents a 34% year-on-year increase compared to 2022. Land-based casinos, while recovering, have not yet reached pre-pandemic levels, with a 19% growth to €250 million in 2023.
Player spending in the Netherlands remains below the European average. Dutch adults spent an average of €272 per capita on gambling in 2023, compared to the EU average of €339. The Netherlands ranks just above Ireland but behind countries like Finland, France, and Denmark in terms of gambling expenditure.
Despite concerns about channelisation, data from the first half of 2024 indicates continued growth in the legal market. The GGR for the first six months of 2024 reached €752 million, an 8% increase from the second half of 2023. This growth was partly driven by an increase in sports betting during major events like the European Championship.
Sports Betting and Other Sectors
Sports betting remains a relatively small portion of the Dutch gambling market, contributing only 9% to the total GGR. Despite this, revenue from sports betting has more than tripled since the legalization of online gambling in 2021. The majority of sports betting revenue—83%—comes from online platforms, with land-based betting accounting for only 17%, largely controlled by Dutch monopolies like Zeturf and TOTO Winkel.
Lotteries continue to hold a significant share of the Dutch gambling market, maintaining a 30% market share in 2023, down slightly from 34% in 2022. This sector is entirely land-based, with no legal online lottery options currently available.
Future Outlook and Tax Concerns
Looking ahead, the Dutch gambling market is expected to face increased challenges due to a forthcoming tax hike. In January 2026, the gambling tax rate will rise from 30.5% to 37.8% of GGR, a move that has sparked concern and opposition within the industry. Although the government plans to introduce the tax increase gradually, operators fear that the higher tax burden could drive more players to unregulated, illegal platforms.
In 2023, Dutch gambling operators paid €117 million in taxes, alongside €698 million in charitable contributions. KSA Chairman Michel Groothuizen emphasized that the KSA will continue to monitor the effects of policy changes, including the impact of the tax hike, through future reports. He expressed curiosity about the upcoming findings in the next monitoring report due in spring 2025, which will further inform regulatory decisions.
Source:
“State of affairs of the Dutch gambling market 2023-2024“, kansspelautoriteit.nl, October 10, 2024.