Arjan Korstjens: The tax in Netherlands increase will be devastating and will have the opposite effect

What do you think about a possible tax increase to 37.8% of GGR?

The tax increase will be devastating and will have the opposite effect. It has already been calculated that it will not have a  € 200 million increase, but a  55 million decrease and I fully support that idea. And why 7,3%? What is the idea behind that? Only a simple calculation because the needed 200 million? In my estimate this tax increase will have effects on both the landbased and online industry

1. 1. Landbased slot arcades: there are about 270 arcades and half of them are nowadays marginal companies. This tax increase will make it impossible to run a profitable business. In the years since the introduction of KOA and Covid these landbased companies had to deal with a lot of extra costs and other effects. For the implementation of Cruks, extra prevention measures, the smoking ban, the economic crisis, you name it. A lot of smaller arcades will stop, only a couple of bigger ones will stay in business
   2. For online it will take a direct bite out of the marketing budget, that will be the easiest way to make Ebitda goals. Other costs will increase for the online operators due to the deposit limits and duty of care measures, so they will be forced to. So less marketing and, promotions and bonusses. The smaller operators will disappear or be sold.
   3. For Holland Casino the effect will be less. Instead of paying dividend they now pay more taxes.

What do you think about the introduction of new deposit limits for players depending on age range?

Deposit limits are stupid, it says nothing about my behavior. Net loss limits are the true indicator, but very difficult the implement. And as long as we have 25+ operators the current deposit limits will not have the effect it was made for. The age-depending element I think is a good thing.

Young people should be protected against themselves, but when did bans ever work? Alcohol 18+, Smoking 18+, nothing helped really. Good education, ongoing conversation and constant monitoring paid by the state. The state makes millions in taxes and dividend from the state owned operators, let’s use that money to educate our young. Research has shown that gambling behavior starts in the teenage group, not waits until 18, 21 or 24.

How big is the gray zone in the Netherlands? I’m asking how much market share do you think illegal operators have in the Netherlands?

The exact size of the gray (black!) market is unknown, but for sure it is growing. The ease of opening an account that accepts crypto is unbelievable, same goes for depositing from my crypto wallet. And who is skilled in that? The younger people? The KSA says channelization is 90% or so, but that is probably the absolute number of people, not the market share in Euro.

Gamblers who do not want the hassle of being bothered and check on everything they do will go crypto/black. So my guess is that the 10% of people who are not going to regulated represent way more than 10% of the total budget, maybe even towards 30 or 40%.

So from a money perspective the channelization is only 70% or less. The new deposit limits and other behavioral measurements will drive that percentage down. From this autumn all legal operators will have to interrupt each player every 30 minutes and tell how long they are playing and how much they have played. Can you imagine that a bartenders has to tap you on the should each half hour and tell you how much you drank? I would leave that bar immediately and find a bar where they are not doing that.

Do tax increases, as well as new limits or restrictions related to advertising have a positive impact on the legal gambling market in the Netherlands?

Seeing my previous answers I do not see any positive effects for the legal offer in Netherlands, only negative. For operators, advertising companies, but most of all for players. The politicians and KSA are driving problem gamblers and young people in the hands of the black market where they will be lost out of sight.

What do you think the regulator should do to protect players and the legal gambling market in the Netherlands?

For this answer I look back at the time of the prohibition in the USA. Illegal speak easy’s were everywhere and the police offers raided distilleries, destroying equipment and stock. They were even more efficient that our KSA, because at this moment this clawless tiger is only growling to illegal operators. So stop growling and start enforcing the law. Of course IP bans are not super effective, but focus on illegal operators and how to stop them. And at least do something except grawling.