Illegal Operators Evaded Taxes in the Netherlands

The Netherlands admitted to having investigated five unlicensed gambling operators prior to the launch of the official Dutch online gambling market. The government planned to look into the businesses of seven other operators as well.

Several Companies Took Bets but Didn’t Pay Taxes

In revealing a memo from 28 October 2021, the Netherlands showed that it had investigated several operators who took bets before the launch of the regulated Dutch online gambling market. The memo was revealed only now thanks to a freedom of information request.

The document outlined several operators that took bets from customers in the Netherlands without paying taxes. According to the memo, these online gambling companies surreptitiously allowed Dutch players to wager on the internet without paying back anything to the government. The memo emphasized that the Dutch treasury has lost potentially hundreds of millions in tax revenue in recent years because of these companies’ actions.

The operators didn’t only avoid taxes concerning players’ bets but also evaded the Netherlands’ corporate tax and income tax. According to the memo, most of the gambling businesses in question had their headquarters in either Malta or Curacao and were licensed in their home markets. Because of this, the memo says, the companies were able to get away with huge sums from the Netherlands without paying taxes.

Dutch Authorities Investigated the Cases

Criminal and media investigations led to three tax investigations that put the rough total amount of money the operators took from the Netherlands at around $208 million. Later investigations uncovered several other such companies that may have also taken as much as $104 million.

The memo concluded that a total of 12 “Dutch” iGaming companies had been identified as of the time of the writing. At that time, the Dutch government had investigated five of them and was making plans to investigate the other seven as well. A single investigation, the Netherlands said, could take anywhere between 500 and 2,000 hours of work, making it a very laborious process.

In the meantime, the Kansspelautoriteit, the Netherlands’ gambling authority, continues to diligently regulate the legal Dutch market. The KSA just fined Toto Online, which breached the rules on gambling advertising and incentivized young people to play. The operator also offered various bonus offerings, which is yet another breach.

Earlier this month, the KSA also warned several operators that violated certain rules amid the World Cup hype. This included disallowed offers and faulty advertisements featuring “role models” – something strictly forbidden in the Netherlands.