Dutch Betting and Gaming Tax expected to increase from 30.5% to 37.8%

The coalition parties to the new Dutch government that is planned to being installed July 2 intend to adhere to an outline agreement on government policy that may significantly impact the Dutch Betting and Gaming sector. Based on the budgetary annex of the agreement, the coalition parties intend to increase the Dutch Betting and Gaming Tax (BGT) rate to 37.8%, which means a 7.3 percentage point increase from the current BGT rate (30.5%). The higher BGT rate should lead to increased BGT revenues for the government of EUR 202 million annually. 

The coalition parties apparently do not expect a shift in customer behavior following the increased BGT rate. Critics to the intended increase include online gambling trade organisations NOGA and VNLOK, who fear the increased BGT rate will lead to deterioration of the legal offering of games of chance, which in turn may in fact lead players turning to illegal games of chance.According to NOGA, the budgetary measure may be counterproductive since organisers of illegal games of chance may not intervene in cases of problematic gaming behavior and associated costs will be passed on to the Dutch taxpayer. 

Based on the official analysis from the Dutch Ministry of Domestic Affairs, the increase of the BGT rate to 37.8% affects the earning capacity of the state-owned lottery and casino (respectively Nederlandse Lotterij and Holland Casino). According to the analysis, Holland Casino's expenses will increase as a result, putting the company in a loss-making position and putting pressure on its continuity. For the lottery, the higher expenses will lead to lower payments to the state, charities and sports. 

National sports organisation NOC-NSF also red flags decreased sports sponsoring resulting from reduced contributions of lotteries to organized sports. The organisation expects the contributions to decrease with EUR 12 million annually, from EUR 52 million to EUR 39.5 million compared to 2023 and fears that this will be detrimental to Dutch sports associations. NOC-NSF expects that the measure will have a counterproductive effect on the state budget if more health issues arise as a consequence of less movement and sports activity for the Dutch population.

The coalition parties intend to implement the increased BGT rate per 1 January 2025. Legislative proposals are expected in the fall of 2024. Bird & Bird will monitor these and other relevant developments in Dutch and international tax law. In case of any queries, please contact your regular advisor with Bird & Bird or the authors of this article.