The Netherlands - why tougher regulation hits legal gambling harder than the black market

When the Dutch government raised the gambling tax from 30.5% to 37.8% in 2025–2026, the calculation seemed straightforward: a higher rate would mean more money for the state budget. A joint monitoring report by the Ministry of Finance and the local regulator, the Kansspelautoriteit, published in June 2026, showed otherwise: actual budget revenues turned out to be tens of percent lower than expected. A detailed analysis of the report shows that the reasons go deeper than simply raising the tax rate. And this experience is highly relevant when drawing conclusions for Ukraine’s gambling market.

The Netherlands has one of the most developed gambling markets in Western Europe. Yet even advanced jurisdictions are not immune to regulatory miscalculations. The sharp increase in the tax rate from 30.5% to 37.8% was expected, according to the regulator’s estimates, to significantly increase budget revenues. In 2025, revenues were projected to reach €108 million, and in 2026 they were expected to rise to €216 million. However, this did not happen. Actual revenues in 2025 amounted to €83 million, while the forecast for the end of 2026 remains at €138 million.

However, the failure to achieve the expected effect was caused not only by the higher tax rate, but also by other regulatory restrictions introduced shortly before or in parallel with the tax increase. One of the most significant measures was the introduction of a limit on gambling deposits (€300–700 per month) in October 2024. This “ate into” a substantial portion of the taxable base, which, combined with the higher tax rate, produced results that fell well short of the regulator’s expectations.

This is the key lesson: when several stringent regulatory measures are introduced as a package, it becomes impossible to assess the effect of each measure separately. Moreover, a comprehensive regulatory “tightening” aimed at increasing budget revenues can produce the opposite effect. For a regulator considering tax increases, stricter licensing requirements, or other restrictions, this means one thing: changes should be introduced gradually, and the impact of each measure should be assessed separately.

The Dutch example illustrates this particularly clearly, as the tax increase immediately led to a contraction of the market in real terms. The land-based segment was the first to respond. Dutch gaming halls and the Holland Casino network lost 11% of their visitor numbers over the course of a year, while the longer-term trend is even more striking: turnover fell from €941 million in 2019 to €654 million in 2024, a decline that began a year before the tax reform. The JVH Gaming and Fair Play Casino networks publicly cited taxation as one of the reasons for closing offline venues. The conclusion is therefore clear: a sharp increase in the fiscal burden can accelerate the contraction of the legal network of gambling establishments and, consequently, the regulator’s tax base.

At the same time, the effect on the illegal market is likely to be positive, since any restrictions on players aimed at making verification procedures or the gaming process more difficult, or limiting the amount of winnings, may encourage some players to move to illegal operators. In other words, for a certain category of players, the administrative barriers created by more complex regulation may outweigh the risks associated with playing on illegal platforms.

For our market, the Dutch case demonstrates that an uncontrolled combination of stringent measures — taxation, limits, and advertising bans — introduced within a short period of time and without adequate monitoring of their impact on the market primarily harms the legal, transparent segment rather than the illegal one. Ukrainian regulators have an opportunity to learn from the mistakes of others: spread reforms out over time, establish baseline indicators before making changes, and measure not only tax revenues but also the overall impact of regulatory changes on the market.

At the same time, it is important to note that the Dutch case does not undermine the importance of stronger regulation aimed at protecting players from financial losses, addressing problematic gambling behavior, and limiting aggressive advertising and marketing. Deposit limits in the Netherlands did reduce the taxable base, but this may also mean that they curbed spending by vulnerable players, which was their direct purpose, separate from fiscal considerations. The balance between fiscal efficiency and player protection remains a matter of political choice as well as an economic calculation.