European governments are increasingly eyeing the online gambling sector as a lucrative source of tax revenue in the face of strained public budgets and sluggish economic growth. According to the European Gaming & Betting Association (EGBA), the sector contributed €3.8 billion in taxes last year, making it an attractive target for policymakers looking to fill fiscal gaps.
Many governments across Europe are either implementing or proposing steep gambling tax hikes on operators. This move is justified by policymakers as a means to plug budget holes, with gambling often portrayed as an easy target due to the public health arguments against it. Virve Marionneau, a tax expert and associate professor at Helsinki University, notes that gambling has traditionally been seen as a relatively painless source of government revenue. She explains that European tax policies are increasingly focusing on excise duties, particularly those related to environmental and public health, to raise necessary public funds.
However, the effectiveness of these gambling tax policies remains uncertain, and may ultimately harm the industry. The decision-making process behind these policies is complex and often influenced by multiple factors.
In the Netherlands, lawmakers have approved substantial increases in gambling taxes, set to rise from 30.5% to 34.2% of gross gaming revenue (GGR) in January 2025, and further to 37.8% in 2026. The Dutch Treasury anticipated an additional €200 million annually from these hikes. However, data from VNLOK, representing licensed Dutch online gambling providers, indicates a 25% drop in GGR for the first half of 2025 compared to the previous year. This shortfall equates to €200 million less than expected.
VNLOK and the Dutch regulator KSA have voiced concerns about the planned tax increases. When gambling taxes rise, operators often pass these costs onto consumers, leading to higher betting odds, fees, or less attractive promotions. Consequently, players may migrate to the unlicensed market, which is more lucrative but riskier. The KSA stresses the importance of a strong legal market to combat illegal offerings, despite the government’s insistence on maintaining its tax policy, even when revenue falls short.
State Secretary for Taxation Eugène Heijnen has indicated that budgetary rules dictate that tax revenue windfalls and shortfalls are reflected post-policy adoption. Therefore, the revenue shortfall does not warrant a compensatory policy, as explained to the Dutch parliament.
This situation in the Netherlands has captured the attention of other European markets. Gustaf Hoffstedt, secretary general of BOS, the Swedish Trade Association for Online Gambling, notes a European trend of tightening conditions for licensed gambling companies, with tax increases being a key element. He argues that there is a lack of interest in how these changes impact the ability of licensed companies to compete with unlicensed ones. In Sweden, the Ministry of Finance expected to raise €50 million annually through a tax increase from 18% to 22% on GGR starting in July 2024. However, Hoffstedt believes the actual figures will be lower, between €20-40 million, and warns of reduced channelisation and an increase in gambling addiction.
Eastern European markets are following suit. Romania plans to raise the GGR tax from 21% to 27% in July 2025, alongside higher licensing fees. The Czech Republic increased its GGR tax for online betting, bingo, and poker from 23% to 30% in 2024 to bolster public spending. Slovakia, where online casino activity grew by nearly 30% year-on-year in 2024, is considering a 30% tax rate for online gambling. Germany imposes a 5.3% levy on every euro wagered on slot machines and poker, leading to an estimated 80% of online slot play occurring with unlicensed operators, according to the German Online Casino Association (DOCV). As a result, German online casino tax revenue declined by 16% in 2024, with a 47% drop since 2022.
France, one of Europe’s costliest markets for operators, plans to expand GGR taxation, aiming to generate an additional €1.6 billion in gambling revenue. In contrast, Malta and Estonia maintain low tax rates to attract onshore operators, while France uses high rates to limit market entry.
In the UK, a market known for a balanced regulatory approach, the government proposed consolidating its remote gambling tax rates in April. This has raised concerns within the industry, fearing a potential uniform 21% duty across all gambling sectors. Voices like former Prime Minister Gordon Brown and The Institute for Public Policy Research (IPPR) advocate for a larger tax increase to combat child poverty, suggesting substantial hikes in remote gaming duty and other gambling-related taxes to generate €1.5 billion.
The UK’s Betting and Gaming Council warns that such proposals could drive consumers to the unlicensed market, a claim dismissed by IPPR. Dan Waugh, a partner at Regulus Partners, suggests that economic, policy, and political factors are driving the government’s considerations. The UK government is expected to detail its plans in the autumn budget of 2025.
The UK’s approach will likely influence the broader European market. Hoffstedt emphasizes that the UK, alongside Denmark, has successfully balanced high channelisation and consumer protection. Any decline in channelisation could negatively impact European gambling markets. He hopes governments will recognize the potential pitfalls of pushing consumers toward unlicensed markets, noting that such a strategy is bound to fail wherever implemented.
Topics: Romania · Denmark · France · Germany · Malta · Netherlands
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