The Dutch gaming authority, Kansspelautoriteit (KSA), has declared that the market’s channeling rate is improbable to attain the 80% objective by 2024.
The KSA utilizes reports from H2 Gambling Capital and Regulus Partners to gauge the overall magnitude of the Dutch online gambling market.
Regulus forecasts that by 2024, three years subsequent to the initiation of legal online gambling, the total market size, encompassing both legal and illicit markets, will attain €8.27 billion, excluding bonuses. Conversely, H2 predicts that the market value, inclusive of bonuses, will reach €10.8 billion.
The KSA observes that the disparity in bonuses “nearly entirely” reflects the divergence between these two figures.
Focusing solely on the legal market, H2 predicts revenue of €7.57 billion in 2024, whereas Regulus does not segregate regulated revenue from the aggregate overseas revenue.
This signifies that roughly 70% of revenue will flow into the legal market, falling short of the KSA’s present 80% objective.
H2 highlights that the tax rate is a “significant impediment” to Dutch channelization, with online gambling taxed at 29%, exceeding the 18% in Sweden or the 20% in Denmark.
The KSA asserts: “Providers will endeavor to transfer the gambling tax to players (partially). This renders legal gaming less appealing.”
At present, in the Netherlands, unlawful betting providers do not contribute any gambling levies. This scenario motivates price-conscious bettors to select unlawful providers.
Although Regulus did not break down the channels by earnings, the KSA indicated that it “implicitly forecasts” that 90% of players would transition to the regulated marketplace. It added that this depends on the severity of advertising rules.
The KSA also observed that the effect of channeling would vary based on the vertical considered.
For instance, poker players might be more inclined to play on websites with substantial liquidity, while sports betting players might seek the most favorable odds, and casino players might look for incentives.
The regulator highlighted that Regulus’ projected revenue for the entire market in 2021 was €544 million, exceeding the €513 million forecast for H2.
However, the H2 forecast predicted faster market expansion. It estimated revenue in 2020 to be €416 million, whereas Regulus’ forecast was €394 million.
“This demonstrates that there is (and will continue to be) uncertainty regarding the precise figures, particularly for the illicit portion of the market,” it stated.
Online gambling in the Netherlands is anticipated to commence on October 1, after being postponed three times. Earlier this month, the government submitted the country’s secondary gambling regulations to the country’s official gazette.
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