The entire range of rates being proposed by the Dutch government are too high for many operators, and also threaten to unfairly sting land-based providers.
The Social Democrat Party of the Netherlands government is threatening to withdraw support for legalization of online gambling if a 29% tax rate threshold is not met.
Tax Rate for Online Operators
A Parliamentary disagreement over the tax rate for remote online operators is holding up approval and regulation of online gaming in the Netherlands.
The country's Social Democratic party is opposing the current tax proposal of 20% of gross gaming revenue for online gambling, a figure 9% lower than the 29% rate that currently exists for land-based operators including Holland Casino.
Penalizing Land-Based Operators
Labour MP Mei Li Vos voiced disapproval with the lower tax rate for online operations, calling them “unacceptable” because they encourage consumer preferences for online products, leaving land-based providers unfairly penalized.
Uniform Tax Proposal
For this reason, Vos further asserted that online products in general should be taxed at the same rate as offline products, with the proposed gaming rate increasing across the board to 29%.
A uniform tax rate would break with Dutch regulation tradition, as the Netherlands currently imposes different rates across its gambling sector. Further, all national lotteries are already required to donate 40% of their gross revenues from gaming to charitable and sports organizations.
29% Unrealistic
A source familiar with the negotiations told eGaming Review this morning that the 29% rate is unrealistic and would cause more problems than it would solve, increasing black market activity instead of quelling it, as the legislation intended.
10% Realistic
The debate clashes with more pragmatic business sense discussed among gaming operators at the Gaming Holland conference this week, where lowering the tax to a more realistic 10% was being discussed.
Gaming operators such as Paddy Power have previously expressed the likelihood that current tax proposals in the Netherlands would discourage they and other operators from entering the Dutch market completely.
Launch Delayed
The clash between the two leading parties of the Dutch Parliament's ruling coalition almost certainly assures that the opening of the Dutch market will not meet is target date of Q1 2015.
Blackjack
Slots
Roulette
Baccarat
Craps
Poker
