Online Gaming Bill Passes in the Dutch Lower House
Online poker and other gaming has remained unregulated in the Netherlands despite many years of attempts by Dutch legislators to bring a regulated online gaming regime to the country to combat gray-market operators and bring tax income into the country.
The outlook is positive for change, as the Dutch Lower House approved an iGaming bill during a vote last week. Industry experts believe that the bill should quickly pass through the Senate and become law of the land.
If passed, the new law would likely be in effect in early 2017, which would begin the process of operators applying for licenses. It is believed many gaming companies will apply for licenses, with over 200 online gaming operators expressing interest in April 2015, according to a gaming report released by the Dutch independent gambling regulator Kansspelautoriteit (KSA).
Assuming everything runs smoothly, the country should see regulated online poker in the second half of the year.
Just a month ago, this time frame appeared to be optimistic at best with KSA Senior Communications Advisor Martijn van de Koolwijk explaining in an interview that, "Consideration of the bill has been postponed three times. Moreover, the law must be approved by both chambers and then the subordinate legislation must still be worked out."
Higher Taxes Than Originally Proposed
Despite the positive news, the bill contains several conditions that could prove to be troublesome for some gaming operators. First and foremost, the tax rate online gaming companies would be subject to if the bill becomes law is 29 percent of gross gaming revenue (GGR). Earlier drafts of the bill featured a much lower tax rate of 20-percent GGR.
The main reason the proposed tax-rate was increased in the latest bill is believed to be pressure from the country's existing land-based casinos owned by the Holland Casino monopoly, who already subject to 29-percent GGR.
High tax rates are unlikely to keep the major operators from applying for licenses. Although this proposed rate is almost double the 15-percent GGR tax rate applied in the United Kingdom, it is still less than that of the 35-percent GGR tax-rate applied in Greece and the two percent of raked pots in France where the country's gaming regulator ARJEL estimates this translates to approximately 37-38 percent of GGR.
Additionally, it is lower than what other countries recently approved. Portugal will be applying a 30-percent GGR tax rate to gaming operators when online poker which isn't expected to be launched until at least November and the Czech Republic just passed gaming laws with a 35-percent GGR tax rate.
Despite other countries passing laws with higher tax rates, this may lead to an undesirable effect with gaming operators unable to competitive offerings when compared to grey-market operators. The bill proposes that after three years the tax rate could be lowered to 25-percent GGR, but this might not make much of a difference to how gaming operators approach their rake structure and promotions to the Dutch market.
The gaming bill contains other restrictions which may prove to be unattractive to gaming operators. Advertising will be limited if the bill becomes law and perhaps more importantly online gaming operators will not be allowed to utilize their existing databases of Dutch customers to directly market their services to.
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