Dutch Online Gambling Worth Up To €370m, Says GamblingData

Dutch online gambling operators can expect to generate €266.5m in gross gambling yield in the first year of regulation, a figure that will rise to almost €370m in 2016, according to a new report from GamblingData.

The Netherlands is on track to become Europe’s next major online gambling market to open for business following the publication by the Dutch government in May of a draft bill that seeks to fully regulate the sector for the first time.

If implemented as it stands, the draft law would impose a 20 percent tax on gross gambling yield (GGY) and would not limit the number of licences issued or restrict the types of online gambling which could be offered to consumers, with the exception of a ban on spread betting.

Pending a vote in the lower house, the bill is expected to take effect from January 2015.

In the wake of the publication of the draft law, GamblingData has set out to forecast quarterly and annual GGY for online sports betting, casino and poker in the Netherlands over the first three years of regulation.

Based on an effective market launch date of January 2015, GamblingData estimates that online gambling in the Netherlands will generate approximately €266.5m in GGY in the first full year.

Licensees can then expect to see revenues, measured as GGY, grow 38 percent year-on-year to €368.5m in 2016, as sports betting benefits from the Euro 2016 Football Championship in France and online poker ramps up rapidly on a sequential quarterly basis.

GamblingData expects that market growth will flatten somewhat in 2017, contracting by 1 percent to €365.7m as poker spend stalls and sports betting suffers from the absence of a major summer football tournament.

On the basis of a relatively liberal regulatory system and the moderate taxation levels put forward in May, GamblingData believes unlicensed operators will be constrained to around 13 percent of the market from 2015 to 2017, safely within of the maximum 25 percent share that the draft bill envisions.

In line with previous reports, GamblingData's Dutch forecasts are predicated on base data from an established European regulated market, in this case Italy, and are calculated using GamblingData’s proprietary forecasting model, incorporating a quantitative and qualitative comparison of the two countries under observation.

An adult population just over a quarter of the size of Italy’s will inevitably limit the scale of theDutch market, but, adjusting for this differential, GamblingData’s analysis of operating conditions in the two countries foresees a Dutch regulated market more favourable towards operators than its Italian predecessor.

Some political risk remains however, with the operator-friendly provisions yet to be cemented into law. Currently the draft bill is expected to reach parliament around the turn of the year, with votes in the lower and upper house to follow.