Legalization of Dutch Online Gambling May Take Years to Accomplish

In early October, Dutch newspaper Telegraaf leaked news of the government’s plans to legalize and regulate online gambling sites in the Netherlands. Since then, little more information has come about, and players are understandably becoming anxious. The process, however, may take up to two years to complete.

The initial phase will involve drafting new Dutch gambling laws to govern the licensing and regulation procedures for online gambling sites. These laws must be approved internally, but must also undergo review by the European Court of Justice before they may be put into action.

Once new laws are in place, work can begin on building a regulatory system to distribute licenses. Initial reports suggested the Dutch government wants to auction licenses to the highest bidder, but whether this will be the actual model is not clear.

Licensees will likely have to register with Dutch tax authorities. The current gambling tax in the Netherlands is 29 percent, a figure that will likely keep quite a few foreign operators away. Lowering this tax for online gambling, especially for foreign operators, would likely bring in more competition, but because the Dutch government seems to be most interested in raising tax money through this venture, it is not likely that the tax rate will be lowered.

In the meantime, Holland Casino’s land-based gambling business continues to flourish, while foreign gambling groups continue to offer internet gambling in Holland, enjoying tax-free earnings from local players. Once online gambling in the country becomes regulated, however, these unlicensed gambling sites may well be blocked by Dutch ISPs – that remains to be seen.