Back in 2012, the land-based gaming sector in Denmark had put forward an official complaint with regards to the regulations that were subsequently applied to its online gaming market. In the present, a similar case occurred this week when the European Amusement and Gaming Federation EUROMAT along with its Dutch member, the VAN Kansspelen Branche-organisatie presented a complaint to the European Commission with regards to Holland’s upcoming igaming legislation.

As markets in Europe are looking to regulate their gaming sectors, much debate is being created regarding igaming taxrates. The main question that arises is whether these rates allow for igaming operators to operate a viable business.

According to the new legislation, a 20% tax rate is to be applied on online operators’ gross profits. EUROMAT questioned this legislation representing state aid is in fact in line with the Dutch government’s “common interest objectives”.

EUROMAT pointed out that the Dutch government did not hide the fact that the new legislation applying a differentiated tax-rate for land-based and online operators is being proposed purely for fiscal reasons. This is unlike the Danish proposition, where the government’s motive of common interest objective supporting the difference in tax rates was responsible gambling issues.

In view of the ongoing issue, EUROMAT pointed out that it is important to consider whether lowering tax rates would actually be a more successful incentive than applying tax differentiation to land-based and igaming operators. EUROMAT further pointed out that differentiated tax rates will still attract responsible operators that want to grow within regulated markets.

The way it works in this case is that operators will either choose to get a licence or else geo-block Dutch customers. No evidence suggests that lower tax rates would attract more online operators to the market.

The EUROMAT Gaming Summit is set to be held in Amsterdam on the 28th of May and the Dutch State Secretary for Security and Justice Klass Dijkhoff will be addressing those present. Industry operators attending the summit are not likely to receive his key note speech very positively.

Particularly since 2011, much more information has been made available and accessible with regards to taxation rates and whether online operators would opt to apply for a licence and how they would adapt to taxation in terms of their operations.

EUROSTAT noted that since then, several online operators opted to operate only in regulated territories and took an active stand on ceasing operations in countries where they did not hold a licence. In the Dutch case, this translates to no impact on the amount of illegal gambling activity that goes on in the case that an operator chooses not to apply for a licence.