Economics of Gambling in Netherlands

The Netherlands Gaming Control Board (College van toezicht op de kansspelen) was established January 1st 1996 as an independent advisory body to the Minister of Justice in respect of the national gaming organizations. The Board advises the Minister of Justice on the issuing, alteration and withdrawal of the licenses for these organizations and on the approval of their constitution and regulations. The Board does not have any coercive or compulsory powers. The department of Justice is the authority to grant licenses regarding games of chance in the Netherlands.

Dutch Betting and Gaming Gross Turnover (1999-2003)

Source: Adapted from GBGC Report

Holland Casino and the Stichting Exploitatie Nederlandse Staatsloterij (SENS, better known as the Dutch State Lottery) are the two state controlled licensees. De Lotto (National Sports Totalizator Foundation) has a license for organizing instant lottery, sports betting and lotto games. De Lotto is a semi private foundation and has no direct relations, other than its license, with the government. Scientific Games Racing B.V. has a license for horse betting and is a subsidiary of SGI. Three private sector companies, joined in National Good Causes Lotteries Holding have licenses for the national charity lotteries BankGiro Lottery, National Postal code Lottery and Sponsor Lottery. Gambling machines outside the casinos are operated by private sector companies.

The Netherlands Betting and Gaming Minopolies CCY excl. Gaming Machines (1994-2003)

Source: Adapted from GBGC Report

Following is a summary of the government’s decisions that led to changes in gaming regulation in Netherlands.

A study has been commissioned into problem gambling in the Netherlands. The report has been published in October 2005. It is estimated that there are about 40.000 problem gamblers (instead of the earlier estimated 70.000) in the Netherlands, plus another 70.000 persons at risk of becoming so.

The casino market will not be opened and Holland Casino will remain the only operator. The number of allowed casino operations has increased from 12 to 14. In March 2006 the new Holland Casino Venlo has been opened and in December 2006 the new Holland Casino Leeuwarden will be opened. Main objective of the new operations is the prevention of illegal casinos.

A study has been conducted into the demand and need for more charitable lotteries. No new licenses will be issued. The percentage of the sales of charitable lotteries that has to be contributed to good causes has been reduced from 60% tot 50% as of 1 September 2004.

Conditions for running charitable lotteries, lotto games and state lottery games will be harmonised. However, the lotto and state lottery games will keep their position as lotteries with a high percentage for prizes (prijzenloterijen). Charitable lotteries will keep their position as lotteries with a high percentage for contribution to good causes (goede doelenloterijen).

In 2004 a study was conducted into the distribution of revenues amongst the good causes. A program of certification will be introduced; only certified organisations will be able to receive or redistribute monies from the lotteries.

Interactive internet gaming will be allowed on an experimental 3-year basis for Holland Casino only. To achieve this however, a partial change of the Act on Games of Chance is needed. After an evaluation a decision will be taken on continuation of interactive internet gaming and the number of operators.

Promotional games will be regulated in the Act on Games of Chance. A code of conduct has come into force as of 1 January 2006, in anticipation of an amendment of the Act on Games of Chance.

Gaming regulation has been concentrated in one department – the department of Justice – instead of the five departments that used to be involved in gaming regulation.

The existing Gaming control board will be replaced by a new regulatory authority with more powers, regulating all licensees, including the gaming machines operators, in the Netherlands. The status of the new regulator, an ‘external’ gaming board or a government agency, is still under discussion.

Enforcement of the Act on Games of Chance and prosecution of illegal gambling has been intensified by the police and the public prosecutor’s office. After the amendment of the legislation, the new regulatory authority will have powers based on administrative law.

The existing lotteries tax on the prices of the winners will be reviewed. The tax on gross gaming revenue of casino gaming will remain. Meanwhile the tax on the prizes of the winners has been increased from 25% to 29% and the casino gaming tax from 33,33% to 40,85% as of 1 January 2006.

Market Share of Lottery Licensees turnover in € million (2000 – 2004):

Turnover > Year > Total SNS BGL SL NPL Lotto Instant > Lottery > Totalisator
2000 > 1235.0 / 100% > 596.0 / 48.3% > 67.4 / 5.5% > 50.4 / 4% > 262.7 / 21.3% > 147.1 / 11.9% > 73.3 / 6% > 38.1 / 3%
2001 > 1351.9 / 100% > 658.8 / 49% > 66.4 / 4.8% > 52.4 / 3.8% > 292.9 / 21.7% > 172.1 / 12.7% > 71.9 / 5.3% > 37.4 / 2.7%
2002 > 1463.4 / 100% > 689.5 / 47.1% > 70.7 / 4.8% > 68.3 / 4.7% > 338.3 / 23.1% > 194 / 13.3% > 65 / 4.4% > 37.6 / 2.6%
2003 > 1520.8 / 100% > 699.1 / 45.9% > 79.8 / 5.3% > 69.6 / 4.6% > 362.1 / 23.8% > 214.2 / 14.1% > 62 / 4.1% > 34 / 2.2%
2004 > 1549.5 / 100% > 697.5 / 45% > 84.2 / 5.5% > 72.8 / 4.7% > 393.5 / 25.4% > 211.3 / 13.6% > 58.3 / 3.8% > 31.9 / 2%

Company Identification:
SNS: Staatsloterij
BGL: BankGiro Loterij
SL: Sponsor Loterij
NPL: Nationale Postcode Loterij

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands, from annual Gaming Control Board reports.

Gambling Turnover Market Share 2004:

Company Identification:
SNS: Staatsloterij
BGL: BankGiro Loterij
SL: Spon54sor Loterij
NPL: Nationale Postcode Loterij

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands

Over the past five years the Nationale Postcode Loterij has increased its market share. This increase is expected to continue. The Staatsloterij and the Instantloterij are losing market share.

Holland Casino is likely to be awarded an exclusive license to operate the sole Dutch-based internet casino for the duration of the experiment (3 years). Between 2000 and 2004 the gambling revenue from all legal gaming (except Gaming machines) has grown from approximately € 1,121.1 million in 2000 up to approximately € 1,519.3 million in 2004.

GGR of Netherlands License Holders 2000 – 20004 (in € millions)

Year > 2000 > 2001 > 2002 > 2003 > 2004
Total revenue > 1,211.1 > 1,289.0 > 1,416.2 > 1,500.5 > 1,519.3

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands

GGR 2004 (in € millions):

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands

Gross Gaming Revenue of Netherlands Gambling Sector 2000 – 2004 (in € millions)

Revenue > Year > Casino > SNS > BGL > SL > NPL > Lotto > Instant Lottery > Totalisator
2000 > 504.3 > 198.4 > 49.9 > 41.2 > 202.1 > 74.8 > 38.1 > 12.3
2001 > 600.5 > 230.3 > 49.2 > 43.8 > 230.4 > 88.6 > 34.3 > 11.9
2002 > 672.8 > 232.2 > 53.1 > 57.7 > 260.2 > 98.6 > 29.6 > 12
2003 > 699.4 > 254 > 61.3 > 58.6 > 279.1 > 109.6 > 27.9 > 10.6
2004 > 681.7 > 276.2 > 62.5 > 58.2 > 294.7 > 108.1 > 28 > 9.9

SNS: Staatsloterij
BGL: BankGiro Loterij
SL: Sponsor Loterij
NPL: Nationale Postcode Loterij

Note: GGR of De Lotto includes sports betting. Based on the assumption that 60% of sales is prize money, GGR for sports betting is as follows:

Sports Betting Sales and Gross Gaming Revenue 2000 – 2004 (in € millions)

Year > Sales > GGR
2000 > 13,5 > 5,4
2001 > 14,9 > 6,0
2002 > 18,2 > 7,3
2003 > 18,3 > 7,3
2004 > 19,9 > 8,0

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands, from annual Gaming Control Board reports.

Gambling Market Statistics 2004:

Year 2004 (in million euro) > turnover / in % > prize money* / in % > gross revenues / in % > costs taxes / in % > net revenues / in % > destination
state lottery > 697,5 / 100% > 421,3 / 60% > 276,2 / 40% > 134,2 / 20% > 0,0 / 0% > 142,0 / 20% > general funds
bankgiro lottery > 84,2 / 100% > 21,7 / 26% > 62,5 / 74% > 15,4 / 18% > 0,0 / 0% > 47,1 / 56% > culture and environmental protection, social welfare and public health
sponsor lottery > 72,8 / 100% > 14,6 / 20% > 58,2 / 80% > 16,6 / 23% > 0,0 / 0% > 41,6 / 57% > culture, social welfare, public health, sports and physical education, humanitarian aid and environmental protection
postcode lottery > 393,5 / 100% > 98,8 / 25% > 294,7 / 75% > 69,5 / 18% > 0,0 / 0% > 225,2 / 57% > development cooperation and humanitarian aid, nature and environment, welfare, culture, public health
lotto and sports betting > 211,3 / 100% > 103,2 / 49% > 108,1 / 51% > 58,2 / 27% > 0,0 / 0% > 49,9 / 24% > sports andphysical education,social welfare,publichealth andculture
instant lottery > 58,3 / 100% > 30,3 / 52% > 28,0 / 48% > 16,3 / 28% > 0,0 / 0% > 11,7 / 20% > sports and physical education, social welfare, public health and culture
horse betting > 31,9 100% 22,0 69% 9,9 31% 7,6 24% 0,0 0% 2,3 7% mainly equestrian sports
casinos > — / — > — / — > 681,7 / — > 413,7 / — > 144,3 / — > 123,7 / — > general funds
total > 1.549,5 / — > 711,9 / — > 1.519,3 / 100% > 731,5 / 48% > 144,3 / 10% > 643,5 / 42%

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands.

Netherland’s Gambling GGR 1995-2004:

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands.

Contributions to charities, sport, culture and other good causes is an important part of gambling in Netherlands. In 2004 the total amount contributed by gambling industry was €643.5 million.

Good Causes Contribution in 2004 (in € millions):

Year > Casino > SNS > BGL > SL > NPL > Lotto > Instant Lottery > Totalisator > Total
2004 > 123.7 > 142 > 47.1 > 41.6 > 225.2 > 49.9 > 11.7 > 2.3 > 643.5

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands

Dutch residents are charged with gambling tax for prizes they win abroad. However, prevention of the assession for double taxation is possible. All gambling operators, except for casino tables and gaming machines in and outside casinos, are charged with a gambling tax of 25% on the prizes above €454. Taxes are levied by deduction on the prize. The table below summarises gambling tax proceeds over the past five years. There is no reason to expect these numbers will change dramatically in the coming years

The Revenues of the Gambling Tax 2001 – 2005 (in € millions):

Year > 2001 > 2002 > 2003 > 2004 > 2005
Revenue gambling tax > 149 > 162 > 156 > 171 > 180

Source: Submission to the Enquiry from the Ministry of Justice, The Netherlands

A survey into participation in foreign games of chance was carried out for the fifth time in 2004 following previous measurements in 1996, 1998, 2000 en 2002. The total amount spent on foreign games of chance in 2004 was 67 million euro. This equals 4% of the amount spent on domestic games of chance in the comparable gaming period (2003). The German games of chance (Lotto and Klassenlotterien) together take up 84% of the total market. The National Lottery (English lotto) takes 1%, (sports)betting/bookmaking takes 2% and other (unspecified) foreign games of chance take 13%.

3.5% of the population stated that they participated in paid interactive internet gaming. This amounts to around 277.000 Dutch citizens between the ages of 18 and 55 years old. In comparison with the study in 2004, the number of participants in paid e-gaming has dropped significantly. This year is the first year a drop in the participation in paid interactive internet gaming is observed. Participation in paid e-gaming is highest among young men. This profile is similar to that of participants in other, more traditional high-risk games of chance. The number of participants in paid e-gaming remains a small group compared to these other, more traditional high-risk games of chance. On average, participants spend 36 euro per month on this type of gaming (44 euro in 2004). Yearly spending in the Dutch internet gaming market is estimated to be between 62 million and 120 million euros.

Gambling is a fairly popular activity in Holland, where most ages participate in the activity. The statistical breakdown of gamblers profile is below.

Social Features of Various Types of Gambling in the Netherlands, 1993:

Population participation

Age 12–75 > 47.3% > 1.8% > 3.5% > 7.0%
N = 7840 > Lotteries (n = 3413) > Bingo (n = 80) > Casino (n = 111) > Slot machines (n = 274)
Women > 51% > 71% > 47% > 28%
Age 40 + > 52% > 52% > 32% > 15%
Class C/D > 45% > 65% > 32% > 45%
Motive: money > 67% > 19% > 15% > 33%
Addiction > 0.06% > 2.5% > 1.3% > 3.8%

C and D social classes are derived from education and professional status.
• Superior to social classes C and D are the classes A, B1 and B2.
• Motives reported less often than ‘money’ were ‘fun of playing’, ‘socialising’ and ‘distraction’.

Source: S. Kingma (1993) Risk-analysis Gambling. Research into the Nature and Prevalence of Gambling