Dutch lawmakers debate tax on internet gambling

Dutch media reports indicate that the politicians are still debating tax levels as the legalisation date for online gambling approaches.

Perhaps encouraged by an April report from regulator Kansspelautorieit (KSA) that there has been significant interest in licensing for Dutch online gambling operations, with over 200 operators in contact, Dutch legislators are reportedly showing renewed interest in the revenue potential of the Remote Gaming Act.

The State Secretary has been asked to provide a new estimate of the potential market, alongside a fresh estimate of what sort of tax revenues that market might generate.

In addition, the rate of taxation apparently remains a point of difference; at present the government considers a 20 percent tax rate for online gambling to be appropriate – 9 percent lower than that applied to land gambling activity, but there are lawmakers who feel that a uniform rate of taxation somewhere between the two would be fairer.

That raises the question of how much gambling is likely to take place online, and how much in the land gambling channel, and the State Secretary has been asked to consider this aspect as well.

Industry researchers have already cautioned that setting too high a tax rate will have a counter-productive effect on internet operators seeking Dutch licensing, reasoning that higher taxes mean less attractive licensed online operator offers for players in a competitive market.

That could result in local gamblers favouring unlicensed internet operators with better offers, thus reducing the potential for both licensing and operational fees and taxes.

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