Gambling Commission and Dutch Regulator KSA Agree New MoU

British regulator the Gambling Commission has signed a new memorandum of understanding (MoU) with its Dutch counterpart the Kansspelautoriteit (KSA), in an attempt to tackle the illegal gambling market.

The Commission met with the KSA at the International Association of Gaming Regulators conference in Canada last month, and the discussions have led to the Commission’s first follow-up MoU with any country. The agreement was reached by Gambling Commission CEO Andrew Rhodes and KSA Chair Michel Groothuizen.

Both regulators will work much closer on tackling the illegal gambling market, and will share important regulatory information with one another.

An ongoing relationship

The two regulators first signed an MoU in May 2021, which was set up ahead of the launch of the regulated Dutch online gambling market in October that year. The 2021 MoU focused on protecting players from gambling-related harm and preventing crime such as money laundering and terrorist financing.

Black market affecting both countries

The black market is a key issue for both countries to consider at this time. Recent research has shown the illegal market is thriving in the Netherlands, with data from H2 Gambling Capital showing the market is split 50-50 between legal and illegal operators, in terms of the number of operators taking bets in the country. This is despite the KSA’s figures showing that 93% of the total bets being made online in the Netherlands are from the regulated market.

Restrictions taking hold

By 2030, regulated online operators are forecast to make up €1.21bn of gross revenue, giving them just a 45% market share. Part of the reason for the growth of the black market in the Netherlands could be the number of marketing restrictions and an increase in tax that have been brought in since the market opened.

In 2023, a two-year process of marketing prohibitions began, starting with the banning of untargeted gambling advertising, and this was followed by the prohibition of programming and event sponsorship in 2024. In June this year, a ban on gambling sponsorship for sports clubs and competitions was implemented.

On top of the marketing issues, operators were faced with an increase in online gambling tax, from 30.5% of gross gaming revenue, to 34.2%, on January 1, 2025; the rate will rise again to 37.8% in 2026. In August, figures released by trade association VNLOK showed tax revenue from operators in the Netherlands stands at just 83% of last year’s level, despite the tax increase.

UK black market could grow with RBGD

In the UK meanwhile, there are similar concerns about the growth of the black market, especially if the remote betting and gaming duty (RBGD) is announced by Chancellor Rachel Reeves later this month as expected. The RBGD would replace the current system of three separate betting taxes. It is unclear what the new tax rate would be, and while industry insiders think a 21%-25% of gross profit rate would be likely, 101 Labour MPs have called for a rate as high as 50%.

A report published by Ernst & Young last month showed a 50% tax rate could also lead to £8.4 billion in betting stakes moving to the black market, meaning £290m in tax revenue would be lost, along with excise revenue of £1.06 billion for operators. In a separate report in 2024, Frontier Economics estimated £2.7 billion is being staked online annually on the black market in the UK.