Dutch tax rate row threatens online regulation

A row over the rate of tax remote operators should pay in a regulated Dutch market is threatening to delay regulatory progress after the country’s Social Democratic party said it would vote against current proposals.

Draft legislation has suggested a tax rate of 20% of gross gaming revenue should be established for online gambling, lower than the 29% rate set for land-based operators such as Holland Casino.

Labour MP Mei Li Vos has criticised the proposals, labelling them “unacceptable” and likely to lead to a consumer shift to online products, leaving land-based establishments vulnerable.

Vos argued that taxation of gambling products should be set at a single rate for both online and offline products and that the proposed rate should be increased to 29%.

The Netherlands already has different tax rates across the gambling sector, with the country’s various lotteries forced to donate 40% of gross gaming revenue to charitable causes and sports foundations.

Speaking to eGaming Review this morning, one source familiar with the matter said that such a rate would be hugely problematic and would defeat the Bill’s object of quashing the country’s black market.

The news also follows Unibet CEO Henrik Tjärnström, speaking at this week’s Gaming in Holland conference, debating the need to lower the proposed tax rate to 10%, while operators including Paddy Power have previously stated that the current proposed tax regime would put them off entering the market.

The country’s Secretary of State Fred Teeven has not responded to Vos’ request, with the Bill currently under discussion and expected to pass the Council of Ministers next Friday.

After passing the Council of Ministers, the Bill is set to be discussed before Parliament this autumn however any rift between the two parties forming the ruling coalition is likely to delay the process beyond the targeted opening in Q1 2015.