State income from taxation

The Netherlands has built a model in which the state's income from the gambling industry is formed not by one bet, but by a "package" of taxes and fees. The central logic is to tax the gross gaming income (GGR) of the operator, regulate the transparency of flows and at the same time support sports and social initiatives through targeted lottery deductions. Below is a detailed analysis of the revenue architecture, without "subtle benefits," which are changing, but with stable principles on which the market rests.

1) Basic architecture of state revenues

1. Gambling tax (GGR-based)

Basis of receipts. Calculated from gross gaming income:

[
\ textbf {GGR} =\text {players' bets} -\text {winnings payments}
]

Applies to online casino verticals (slots, live), sports betting, land casinos and a number of other products. For lotteries, there are separate rules for calculating the prize pool and tax burden.

2. Corporate profit taxation

After paying gambling tax and operating expenses, the company pays corporate income tax at nationwide rates (progressive thresholds). This is the second loop of replenishment of the budget.

3. Licensing and supervision fees (regulatory)

One-time license/application fee.

KSA's annual oversight fee (proportional to the scale of the business; covers the expenses of the regulator for monitoring, CRUKS, audit, etc.).

These amounts are not always called "tax," but are fiscal revenues of the public sector.

4. Lottery deductions for sports and "good causes"

A signature feature of the Netherlands: part of Nederlandse Loterij's profits go to sports (through NOCNSF) and social projects. For the state, this is a quasi-budgetary support channel without direct taxation of citizens.

5. Indirect receipts

Personal income tax and social contributions from casino workers, live dealer studios, support, IT and marketing.

Taxes from suppliers (content studios, payment and KYC providers, consulting).

Local taxes (real estate, land, offline advertising fees, etc.).

💡 Important: operator gambling services are usually exempt from VAT, but the supply of related services (marketing, IT, merch, etc.) forms the VAT contour of contractors.

2) Verticals and their contributions

Online casinos (slots, live games)

High session frequency → stable GGR circuit.

Transparent game cards (RTP), tempo control, behavioral monitoring have reduced "noise," which makes arrivals predictable.

Sports betting (online/offline)

Revenue "breathes" the tournament calendar; peak months with major events give jumps in GGR and, accordingly, tax.

Land-based casinos and gaming halls

Contribution to gambling tax + corporation tax; additionally - employment and indirect taxes (offices, catering, security, events).

Lotteries

Separate rules for the formation of the prize fund and tax base; plus sports earmarks and "good causes."

3) How to count: a simple flow model

Let the operator (online casino + sports) have the following indicators for the reporting year:

Player bets (Handle/Turnover): (H)
Payouts of winnings: (P)
GGR: (G = H - P)
Operating expenses (content, fees, staff, hosting, marketing, compliance): (OPEX)
Regulatory Fees (License/Oversight): (REG)
Gambling tax: (T_{game} = G\times r) where (r) is the rate (statutory)
Taxable profit: (\Pi = G - T_{game} - OPEX - REG -\text {other expenses})
Corporation Tax: (T_{corp} =\Pi\times c), where (c) is the effective rate on the scale

State revenue by operator for the year:

[
\ boxed {T _ {game} + T_{corp} + REG +\text {personal income tax/salary contributions} +\text {indirect taxes}}
]

💡 For lotteries, a block of targeted contributions to sports and social programs is added.

4) Illustrative example (conventional figures)

Suppose:

(H = 1 {,} 000) mln
(P = 920) mln → (G = 80) mln
Gambling tax rate (r) - conditional (for example) → (T_{game} = G\times r)
(OPEX = 45) mln
(REG = 2) mln
Suppose the effective corporate tax rate (c) is applied to positive earnings.

Then:

1. The gambling tax directly gives the budget a share of (80) million.

2. The balance after (T_{game}), (OPEX) and (REG) is included in the corporate tax base.

3. In parallel, the state receives personal income tax/contributions from the wage fund and indirect taxes along the chain of suppliers.

This calculation is illustrative: real rates, thresholds and benefits depend on the type of product and the current version of the rules.

5) Why the model is sustainable for the budget

Wide GGR base: vertical differentiation smoothes seasonality.

After 2021, the legal online channel increased sewage (migration from the "gray" zone) → the growth of the tax base.

Supervision and CRUKS reduce the social costs that typically "eat away" at the fiscal effect in unregulated jurisdictions.

Lotteries provide a steady flow for sports and "good causes" without overloading the overall budget.

6) Checklist for the operator (so as not to sag in fiscal efficiency)

1. Correct accounting of GGR by vertical lines; consistency with reporting by content providers and PSPs.

2. Transparent regulatory payments (accounting for supervisory fees KSA, CRUKS-circuit).

3. Separate accounting of marketing/bonuses (clear policy on attribution to expenses vs GGR adjustment).

4. KYC/AML discipline (less risks of blocking and fines that hit the tax base).

5. Optimal mix of content (volatility/frequency → predictability of GGR and therefore tax payments).

6. Cash-flow planning for the payment of gambling tax and corporate tax.

7) Frequent questions

Do players pay tax on winnings?

In a licensed ecosystem, the tax burden is mainly on the operator with GGR. For lotteries and individual products, special rules apply: the operator lays down tax in the economy of the draw and/or shows a "net" gain under the terms of the product.

Is there VAT on gambling?

Gaming services are generally exempt from VAT; but related services (marketing, consulting, IT) are taxed from suppliers.

How are jackpots and bonuses counted?

According to accounting policy: jackpots and bonus expenses are correctly reflected in GGR payments/adjustments so as not to distort the tax base.

8) Risks and compliance factors

Incomplete accounting of GGR → additional charges.

Violation of advertising/responsible play → fines that reduce profits and, ultimately, fiscal returns.

Weak KYC/AML → payment blocks, rising costs, reputational risks.

Underestimation of seasonality (sports) → cash gaps when paying tax.

9) The bottom line

State revenue from the gambling industry in the Netherlands is a multi-circuit system: GGR gambling tax, corporate taxes, regulatory fees, and indirect receipts along the entire value chain. Lotteries add a unique layer of targeted contributions to sports and socially significant projects. Thanks to the strict supervision of KSA, CRUKS and the culture of responsible play, the model remains stable and predictable: the budget receives stable money, and the market receives clear rules of the game.