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Higher online gaming tax in Netherlands

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Dutch Representatives Jeroen van Wijngaarden and Mei Li Vos have advocated higer online gaming tax in Netherlands.

Jeroen van Wijngaarden and Mei Li Vos, two representatives of ruling coalition parties VVD and PvdA have proposed a series of amendments (1, 2, 3) to the Dutch remote gaming bill in order to impose a  higher online gaming tax in Netherlands. The new amendments aim to introduce a uniform tax rate in the country for both land-based and online gaming of 29% of GGR.

Under the original remote gaming bill, that online operators would have to pay taxes equal 20% of GGR in order to force Dutch players to look for licensed operators in place of more cost-friendly unlicensed ones.

Once the higher online gaming tax in Netherlands is imposed and the regulation of the online gaming market boosts tax revenues accordingly, the tax rate for online and land-based operators could be lowered to 25% of GGR after three years.

The recently announced amendments were a big surprise to Dutch operators as the governement, especially State Secretary Klaas Dijkhoff, not long ago actively opposed the higher rate for online operators.

In an exclusive interview with Gaming in Holland, Representative Jeroen van Wijngaarden (VVD) stated that the main reason to leave varied tax rates for land-based and online gaming is “a lack of political support in Parliament”.

 Van Wijngaarden:

“It’s one market, so we want one tax rate. Let’s not make taxes any more complicated than they already are”.

Mei Li Vos also commented on the amendments and higher online gaming tax in Netherlands on her personal Facebook page noting that the concept of differentiated tax rates seemed “rather ridiculous” from the very beginning.

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According to Rutger-Jan Hebben of Speel Verantwoord, the trade organization of online operators who wish to enter a regulated Dutch market, the amendments would greatly affect Dutch players as they would be provided with  “a less attractive product offering”.

 Rutger-Jan Hebben of Speel Verantwoord:

“Game variety and payout rates outside of the Netherlands will end up being more attractive. A significant portion of the one million people in the Netherlands who are already playing online will thus keep opting for unlicensed, non-tax paying operators.”

“Moreover, if there must be a uniform tax rate, it should apply to all equally – including land-based lotteries which are currently paying, as the Netherlands Gaming Authority recently concluded [pp. 47-9], an effective tax rate that is far lower.”

When asked about the future of Dutch online gaming market, Jeroen van Wijngaarden mentioned several ways that are to be used to enforce the new law and to form a fully regulated market.

Jeroen van Wijngaarden, in an exclusive Q&A with Gaming in Holland:

“I believe in the dialectics of progress. We are one of the last countries in Europe to legalize on line gambling, this means we can learn from other countries. So, we will create an enforcement authority disposing of all means necessary to enforce this new law. For example, we will block national and international payments to illegal operators. As a player this means it can happen that you will no longer be able to access one’s playing credit. Additionally we will ban these operators from the Dutch market. For as far as the tax rate is of importance we will lower the overall tax rate to 25%, not just for on line gamblers but for all gamblers and lottery players. It’s one market so we want one tax rate. Let’s not make taxes any more complicated than they already are.”
“In a way, I think it is a somewhat old-fashioned idea to make an artificial distinction between online and offline products and services. The boundary between these two is fading away and products are becoming more and more hybrid.”

Jeroen van Wijngaarden believes that the new law would not have a negative impact on the number of online licenses given out to operators in Netherlands.

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Jeroen van Wijngaarden on higher online gaming tax in Netherlands:

“With the potential of the Dutch market and the perspective of tax cut I think it would be a mistake not to enter the Dutch market from the start, but this is up to companies themselves. I hope we can welcome as many new entrants on the Dutch market as possible. Operators who will violate the new law ought to be banned from the Dutch market for the future. “

According to A Poll (1857 participants on January 6th) in the Dutch daily ‘de Telegraaf’’, 69% people think regulating online gambling will be a fiasco. One reader even stated that “its naïve to think illegal is reduced if a uniform tax rate will be introduced”.
Other readers described the regulation as‘Not enforcable’ and ‘impossible to control’.

Even though the higher online gaming tax in Netherlands is likely to have a number of other consequences for the Dutch online market, it seems certain that the amended bill will pass the Lower House. What is more, the bill which aims to modernize land-based casino regulation is also moving on. The Council of State has recently presented its advice on this bill to the Council of Ministers. The bill is getting closer and closer to being submitted for discussion (in committee) in the Lower House.

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Apart from the proposed higher online gaming tax in Netherlands, there have been several steps taken by Netherlands Gaming Authority.

At the very end of year 2015, Netherlands Gaming Authority released a special overview of the Dutch land-based gaming market of year 2014. According to the report, the  total GGR in 2014 was €2.24 bn, almost the same as in 2013. What is more, lotteries made up 47% of the total land-based market; slot machines 40%; casinos 11%; and sports betting 1% (however, it was quickly growing in power). Per capita expenditures in 2014, when compared to other European countries, were middling. Lastly, the outlook, especially for the casino and sports betting sectors, is positive.

Additionally, answering the official questions by Representatives Ronnes and Oskam (CDA), Dutch Minister of Finance Jeroen Dijsselbloem stated recently that – together with the European Markets in Financial Instruments Directive (MiFID) – binary options used in Netherlands  should be classified as financial instruments rather than a game of chance.

Accordingly, the Netherlands Gaming Authority has judged that overseeing binary option trading is beyond its purview.

Higher online gaming tax in Netherlands was last modified: January 11th, 2016 by CasinoNews.Today