Amsterdam’s Black Market Gambit: High Taxes Push Players Back to the Shadows

(AsiaGameHub) –   By: Alex Mercer, a Tech Director or Geek Analyst at a major Silicon Valley firm

The Dutch gambling market is in a bind. Operators and regulators alike are sounding alarms. Amsterdam recently hosted a gathering. Industry leaders met there. They voiced strong opposition to current gambling restrictions. The core complaint is clear: government policies are hurting legal operators. They are also, ironically, fueling the very black market they aim to suppress. This isn’t just talk; the numbers paint a stark picture of unintended consequences.

The Netherlands relaunched its online gaming market in 2021. The goal was a fair playing field. However, recent reforms have backfired. A significant increase in gambling taxes was implemented. This happened in two stages. The latest hike brought the tax rate to 37.8% of Gross Gaming Revenue (GGR). This took effect in January. The expected boost to government coffers has not materialized. Instead, the opposite is happening. Higher taxes mean higher costs for consumers. Players are now reportedly abandoning the legal Dutch market.

Data from VNLOK, a trade body, is telling. Last year, 70% of licensed online operators saw their GGR drop by over a quarter. This decline occurred after the tax increases. Adding to the pressure, there are political discussions about a complete ban on gambling advertising. This is a drastic shift from current rules, which only restrict sports advertising. Björn Fuchs, VNLOK Chair, warned about this. He stressed that effective regulation must prioritize player protection. He also noted that overly harsh restrictions can inadvertently strengthen the black market.

Fuchs stated, “You need a holistic strategy.” He believes regulation should protect consumers. It must be based on proportionality and evidence. He added, “If a policy fails, it is the consumer base that pays the price.” The Dutch regulator, KSA, is generally seen as approachable. At the Gaming in Holland conference, KSA Director Ella Seijsener echoed these concerns. She publicly opposed a total ban on online provider advertising. She also expressed wariness about proposals to limit the number of legal iGaming operators. Pascal Chaffard of FDJ United, which entered the Dutch market via Unibet after acquiring Kindred, agreed. He said, “Every restrictive measure aimed at licensed operators that does not simultaneously address illegal operators makes the problem worse.” He warned that the proposed advertising ban risks accelerating the shift to illegal operators. He concluded, “The black market does not respect borders, and neither can our response to it.”

The Dutch government’s attempt to control its online gambling market through punitive taxation and advertising bans is a classic case of policy miscalculation. By making the legal channels less attractive and more expensive, they are effectively pushing players back into the arms of unregulated, untaxed offshore operators. This isn’t a new phenomenon; it’s a recurring theme in markets that prioritize revenue extraction over consumer experience and market health. The KSA’s cautious stance and the industry’s unified voice at Gaming in Holland highlight a critical disconnect. The pursuit of short-term fiscal gains is undermining the long-term viability of a regulated market. The black market thrives on such policy failures. It offers what the legal market, under duress, cannot. The current trajectory suggests a continued erosion of the licensed market’s share. This will inevitably lead to a more entrenched and harder-to-combat illegal sector. The government’s strategy is not just flawed; it’s actively counterproductive.

The core issue here is a fundamental misunderstanding of market dynamics. When the cost of legal participation rises significantly, and the perceived benefits diminish, consumers will seek alternatives. The Dutch government’s aggressive tax hikes and potential advertising ban are precisely the kind of measures that drive this behavior. The industry’s plea for proportionality and evidence-based policy is being ignored. The KSA’s willingness to engage and acknowledge the risks is a positive sign, but it appears to be a lone voice against a tide of restrictive policy. The commercial loop is clear: higher taxes lead to higher prices, which lead to player migration. This migration benefits the black market, which operates without oversight or consumer protection. The ultimate industry end-game, from the perspective of the black market, is precisely this scenario. The legal operators are being squeezed from both sides – by the government’s policies and by the competition from illicit sources. The Dutch government needs to rethink its approach before it completely cedes control of its gambling market to the shadows.