How the Dutch Gambling Regulator is Reinventing Itself While Europe Wrestles With a €20 Billion Problem

The Dutch gambling scene is going through one of its most consequential makeovers since the country opened its online market back in 2021. Starting January 1, 2026, the Kansspelautoriteit (the KSA for short) will operate under a completely redesigned structure that tells you everything about where gambling regulation is headed in Europe. Michel Groothuizen isn’t going anywhere; he’ll stay on as chairman and the only full-time member of the board. Two part-time board members will join him, bringing specialized expertise rather than handling the day-to-day grind.

The regulator made it clear in their announcement that this shift is about building “a modern, agile organization that oversees a rapidly changing gambling market.” Translation: the old model wasn’t cutting it anymore. The new setup consolidates operations into three focused directorates that will actually run the show: Player Protection and Management Advice, Licenses and Supervision, and Digitalization, Analysis, and Operations. Roos Lawant takes the first one starting February 2026, Ella Seijsener handles the licensing side, and Daniël Palomo van Es gets the tech-heavy portfolio.

This restructuring also marks the end of an era. Bernadette van Buchem, who’s been vice-chair since 2018, is stepping down after a forty-year run in public service that included stints at the Ministry of Economic Affairs and the Netherlands Authority for Consumers and Markets. Her departure shrinks the board and signals a deliberate move toward a leaner command structure where strategic oversight and operational execution live in separate lanes.

Why the Netherlands Can’t Shake Its Illegal Gambling Problem

Here’s where things get uncomfortable for Dutch regulators. Despite launching a regulated online market with all the proper licensing infrastructure, the country is watching players hemorrhage to unlicensed operators at an alarming rate. The legal market pulled in €1.47 billion in gross gaming revenue during 2024, showing a modest 6% year-over-year bump. But that growth rate tanked in the second half of the year, and by the first half of 2025, legal market revenue had crashed to €600 million: a brutal 16% nosedive compared to late 2024.

Meanwhile, the illegal market isn’t just surviving; it’s thriving. The KSA estimates offshore operators grabbed €617 million in the first half of 2025, meaning for the first time since legalization, the black market outearns the white market in absolute terms. The channelization rate (the percentage of total gambling money flowing through licensed operators) dropped from 51% to 49% in just six months. That might sound like a rounding error, but it represents a fundamental failure of regulatory capture.

What makes this doubly frustrating is that the Netherlands still scores well on player channelization. About 94% of Dutch gamblers stick to licensed platforms. The problem is the remaining 6% who venture offshore happen to be the highest-spending players in the market. They’re chasing better odds, fatter bonuses, and none of the friction that comes with the Netherlands’ strict player protection regime.

The Tax Hike That Backfired Spectacularly

In a move that regulatory economists will study for years, the Dutch government decided to crank up gambling taxes from 30.5% to 34.2% in January 2025, with another increase to 37.8% planned for 2026. The logic seemed sound on paper: higher tax rate equals more revenue for public coffers, right? Except it didn’t work out that way. Tax collections fell by €30 million in the first half of 2025 compared to the same period in 2024, and licensed operators are now contributing just 83% of what they paid the previous year.

Groothuizen didn’t mince words about this. “The increase in the gambling tax means that gambling providers must take measures to maintain their profitability,” he said, explaining that operators responded by slashing advertising budgets, cutting bonuses, and lowering payout percentages. Land-based gambling took an especially hard hit, with the number of venues dropping 9% in Q1 2025: a sharp acceleration from the previous average decline of 6% per year.

Online operators have more flexibility to absorb the pain, but even they’re squeezed. When you combine a 34.2% tax rate with mandatory player protection measures that cap monthly losses at €700 (€300 for young adults aged 18-23) without affordability checks, you end up with a business model that barely pencils out. The Dutch Online Gambling Association put it bluntly: “Death by taxes.” Their data shows operators representing 70% of the market are struggling to stay solvent under these conditions.

Player Protection Rules With Unintended Consequences

October 2024 brought another wave of regulatory tightening. The KSA implemented rules requiring operators to make personal contact with new players who set monthly deposits above €350 (€150 for 18-23 year-olds) and to block deposits exceeding €700 monthly (€300 for young adults) unless the player can demonstrate financial capacity. The average monthly loss per player dropped from €146 to €119 after these measures took effect.

These rules undeniably reduce gambling harm for vulnerable players, which is exactly what they’re designed to do. But they also create powerful incentives for high-rollers to take their business elsewhere. Offshore operators don’t ask for pay stubs or bank statements. They don’t enforce cooling-off periods or mandatory reality checks every hour. For players gambling thousands per month, the unlicensed market offers what feels like freedom, even if it lacks consumer protections.

The Netherlands isn’t unique in struggling with this tension. Sweden shows similar dynamics: overall channelization sits at 85%, but when you break it down by product type, betting hits 92-96% while online casino drops to 72-82%. The UK, with its mature regulatory framework and 97.6% channelization rate, remains the gold standard, but it also hasn’t implemented deposit limits as aggressive as the Netherlands.

Europe’s €20 Billion Problem

Step back and look at the continental picture, and the scale of illegal gambling becomes staggering. A 2024 study by Yield Sec for the European Casino Association found that unlicensed operators captured €80.6 billion in gross gaming revenue across the EU, a 71% market share. Licensed operators pulled in just €33.6 billion, or 29% of total activity. This translates to roughly €20 billion in lost tax revenue for European governments annually.

The busy sports calendar in 2024 (the Paris Olympics and Euro 2024) turbocharged offshore betting. Major events always drive casual gamblers to place wagers, and many discovered that unlicensed sites offered better promotions and fewer restrictions than their regulated counterparts. Once you’ve got someone’s email address and payment details, it’s not hard to keep them engaged.

Illegal operators aren’t just stealing market share; they’re operating entirely outside the anti-money laundering, consumer protection, and responsible gaming frameworks that Europe spent years building. They don’t contribute to treatment programs for problem gamblers. They don’t verify player ages rigorously. They don’t exclude self-banned individuals. And they certainly don’t pay taxes or fund research on gambling harm.

The Growing Alarm About Problem Gambling

While regulators obsess over channelization rates and tax receipts, the human cost keeps mounting. Problem gambling in the Netherlands jumped 24.2% year-over-year in 2023, the sharpest increase among all measured behavioral disorders. Online gambling drove most of this surge, which makes sense given the sector exploded after the Remote Gambling Act launched the regulated market in 2021.

A Dutch addiction study found that 44% of people with harmful gambling patterns also struggle with substance abuse, most commonly alcohol. The CRUKS self-exclusion register – which every licensed operator must check before allowing someone to gamble – had 61,000 active exclusions by the end of 2023, double the number from 2022. Even more telling, the average exclusion period people choose has skyrocketed from 13 years in 2022 to nearly 23 years in 2023, suggesting many registrants view their gambling problem as a lifelong battle.

The KSA conducted 40.3 million daily checks against the CRUKS database in December 2023, up from 31 million in January. That’s a lot of prevention happening in real-time, but it only works within the licensed ecosystem. Players who drift to offshore sites face no such barriers. The most vulnerable individuals (those already excluded from legal gambling) can easily find unlicensed platforms that don’t integrate with national registers.

European Regulators Try Coordinating for Once

Groothuizen has emerged as one of the loudest voices calling for cross-border regulatory cooperation. He joined the board of the Gambling Regulators European Forum for the 2025-2027 term and has been pushing what he calls a “Gambling Interpol” – a centralized enforcement body that could tackle illegal operators systematically instead of the current whack-a-mole approach where each country acts alone.

In November 2025, the UK Gambling Commission and the KSA signed a Memorandum of Understanding to share intelligence on illegal gambling. The timing wasn’t coincidental: six of the top 20 unlicensed operators targeting UK players also appear in the Netherlands’ top 10. These aren’t mom-and-pop operations; they’re sophisticated businesses running on solid tech infrastructure, often licensed in places like Curaçao or Malta but actively targeting markets where they lack authorization.

At a Madrid summit in late 2025, regulators from Germany, Austria, France, the UK, Italy, Portugal, and Spain formalized an agreement to share data on illegal operators and coordinate pressure campaigns against digital platforms, social networks, and affiliates that facilitate unlicensed gambling. The joint statement committed to systematic information-sharing, coordinated enforcement against payment processors and hosting providers, and knowledge exchange on investigation techniques.

This kind of cooperation faces structural limits. Gambling laws vary wildly across Europe; what’s illegal in one country might be fully licensed in another. Sweden bans credit card gambling across the board, while other countries allow it with warnings. Spain prohibits online casino games entirely, pushing that activity offshore or underground. Malta licenses operators who then target markets across Europe, creating jurisdictional nightmares when regulators try to enforce national rules.

Prediction Markets Add Another Layer of Confusion

Just when European regulators thought they had a handle on online casinos and sports betting, prediction markets entered the chat. Platforms like Polymarket, which let users bet on everything from election outcomes to whether it’ll rain in Los Angeles, exist in a regulatory gray zone that nobody’s quite figured out yet.

Belgium’s Kansspelcommissie placed Polymarket on its blacklist in January 2025, classifying it as an illegal gambling operator. Poland followed suit. France’s gambling regulator investigated the platform after a single user dropped $30 million on Trump winning the 2024 election, and Polymarket voluntarily exited that market. Singapore, Thailand, and Taiwan blocked access outright.

The fundamental question “are prediction markets gambling or financial instruments?” lacks a clear answer in Europe. In the US, platforms like Kalshi argue they’re regulated derivatives exchanges, not gambling sites. The Commodity Futures Trading Commission cleared Polymarket to return to the US market in November 2025 after nearly four years of prohibition, treating event contracts as legitimate financial products under federal oversight.

European gambling regulators aren’t buying that distinction. When you’re wagering money on uncertain future outcomes, whether that’s a football match or an election, it looks and feels like gambling to enforcement authorities. Prediction markets don’t fit neatly into existing financial services regulation either, since they’re not trading securities, commodities, or currencies in the traditional sense.

The fragmented response across Europe, with some countries blocking, others tolerating, most just watching, mirrors the broader challenge of creating coherent gambling policy when 27 member states each claim sovereignty over their markets. Any platform willing to geo-block might fly under the radar in jurisdictions that haven’t explicitly addressed prediction markets. Those that don’t block find themselves on blacklists and facing payment restrictions.

Technology Becomes the Enforcement Battleground

Regulators are finally catching on that beating illegal operators requires more than strongly worded press releases. The Netherlands, Italy, France, and several other countries now coordinate with payment service providers to block transactions to unlicensed gambling sites using merchant category code filtering. Brazil’s Central Bank works with Pix and major financial institutions to freeze payments tied to offshore betting. Singapore uses deep packet inspection to identify and neutralize illegal gambling traffic in real-time.

Artificial intelligence is shifting from optional upgrade to regulatory expectation. The UK Gambling Commission requires licensed operators to monitor player behavior continuously and intervene before harm escalates. The KSA demands similar real-time monitoring, particularly around affordability and spending patterns. Spain is building an AI surveillance system tracking over 60 behavioral and transactional indicators across its online gambling market, positioning it as potentially the most advanced oversight model in the EU.

Major operators like Entain have developed proprietary AI systems – in their case, ARC (Advanced Responsibility & Care) – that analyze player behavior, automatically restrict bonuses for high-risk individuals, and document every intervention for compliance audits. This isn’t just good practice; it’s becoming a condition of keeping your license. When William Hill and Betway got fined for targeting marketing at flagged high-risk players, it sent a clear message: having AI isn’t enough if you’re using it unethically.

The CRUKS system demonstrates both the power and limitations of technology-based enforcement. Its integration with DigiD, the Netherlands’ digital identity system, means excluded players can’t slip through with fake documents. The instant verification catches matches within seconds across every licensed platform. But it only works for people with Dutch DigiD accounts gambling on licensed sites. International platforms accepting Dutch players without DigiD verification exist entirely outside this protective system.

What the New Dutch Licensing Rules Actually Mean

When the first wave of five-year licenses expires in October 2026, operators reapplying will face significantly tougher scrutiny. The KSA’s updated framework requires every applicant to submit a detailed exit plan explaining how they’d wind down Dutch operations if their license isn’t renewed, covering customer payouts, data handling, and marketing cessation. It’s an acknowledgment that several operators have already walked away from the market (Tombola pulled out in 2024, citing unbearable regulatory costs), and the regulator wants to ensure future exits don’t leave players holding the bag.

Applicants must also provide comprehensive AML risk assessments under the WWFT (Anti-Money Laundering Act) and demonstrate compliance with any previous court rulings. The KSA explicitly stated that behavior during the initial license period will directly inform renewal decisions. Translation: if you’ve been fined for advertising violations or CRUKS breaches, expect enhanced scrutiny when you reapply.

These requirements reflect a broader European trend toward treating gambling licenses as privilege rather than right. Germany’s Interstate Treaty on Gambling introduced monthly deposit limits and centralized player tracking. Ontario made data-driven responsible gambling systems a licensing condition. The UK implemented stake limits for online slots (£2 for 18-24 year-olds, £5 for everyone else) and mandated financial risk checks at relatively low thresholds.

Where European Gambling Law Refuses to Go

Despite decades of discussion, meaningful harmonization of EU gambling laws remains a pipe dream. Unlike financial services or telecommunications, gambling sits firmly in the “national competence” bucket. The EU’s digital commerce directives explicitly exclude online gambling, including crypto casinos, leaving a legal vacuum that member states fill with wildly divergent policies.

The 2011 Green Paper on Online Gambling sparked conversations about consumer protection and fraud prevention but stopped short of proposing a common framework. The 2014 Recommendation on Consumer Protection and Responsible Gambling outlined best practices but had zero enforcement power, making adoption purely voluntary. Some countries ignored it entirely.

This fragmentation creates obvious problems. An operator licensed in Malta can legally target customers across Europe under freedom of services principles, but individual member states can impose their own licensing requirements too. The result is operators either jump through hoops acquiring licenses in every market they want to serve, or they pick a favorable jurisdiction and operate in regulatory gray zones elsewhere, or they just say screw it and go fully offshore.

Efforts to create minimum EU-wide standards for responsible gambling keep foundering on the same rocks: countries with state monopolies fear losing revenue, liberalized markets don’t want restrictions that push players toward unlicensed sites, and cultural attitudes toward gambling vary so dramatically that consensus proves impossible. Ireland prohibits nearly all gambling, while the UK’s licensing regime is relatively permissive.

The new EU AML Package, which introduces unified anti-money laundering rules, will cover gambling operators starting in 2025-2026. That represents the closest thing to harmonization Europe has achieved, not because anyone cares about gambling per se, but because financial crime and terrorist financing transcend borders in ways that force coordination.

Economic Realities Clash With Social Goals

The Netherlands is learning what happens when you try to have it both ways: maximizing player protection while maintaining a profitable regulated market. Land-based casinos saw revenue drop 5.5% to €1.30 billion in 2024, with Holland Casino forced to reduce operating hours at Rotterdam and Amsterdam locations to avoid losses from the tax increase. The company is considering additional branch closures, unable to generate the extra €100 million needed to offset its higher tax burden.

Online operators face similar pressure but can adapt more nimbly, adjusting payout percentages, cutting customer acquisition costs, or in some cases just exiting the market entirely. The problem is every adaptation that preserves profitability tends to make the licensed product less attractive relative to offshore alternatives. Lower payout rates? Players notice. Fewer bonuses? They notice. Mandatory affordability checks and paperwork requests? They really notice.

The channelization crisis the Netherlands is experiencing offers a cautionary tale for other jurisdictions considering strict regulatory frameworks. You can protect players or you can maximize channelization, but trying to do both simultaneously creates tensions that often resolve in favor of illegal operators. Sweden’s experience echoes this: despite having a licensing system since 2019, channelization for online casinos remains stubbornly stuck in the low-to-mid 70s because players want variety and better odds than regulated sites deliver.

Groothuizen acknowledged these limitations in recent speeches, admitting the current framework hasn’t achieved its potential in preventing gambling harm or stifling illegal gambling. More than 50% of total gambling expenditure still flows to unlicensed operators, highlighting enforcement gaps that technology alone can’t close. His proposed “Gambling Interpol” reflects growing recognition that unilateral action by national regulators simply doesn’t work when operators can relocate servers, switch domain names, and market through untraceable affiliates with minimal friction.

The Reorganization’s Real Message

The KSA’s structural overhaul isn’t just administrative housekeeping. Creating a dedicated directorate for digitalization and analysis signals that modern gambling regulation is fundamentally about data: collecting it, analyzing it, and using it to predict and prevent harm before it manifests. The emphasis on player protection as a separate strategic pillar, rather than a box to check within enforcement, suggests Dutch regulators finally grasp that duty of care can’t be an afterthought.

Consolidating day-to-day operations under three directors while the board focuses on strategy and governance mirrors corporate restructuring principles: separate execution from oversight, clarify accountability, and eliminate the ambiguity that lets problems fester. Whether this actually makes the KSA more “agile” remains to be seen, but the fact that they’re trying while illegal operators are eating their lunch shows at least some institutional self-awareness.

The question is whether any organizational structure can solve problems that are fundamentally about economic incentives and jurisdictional fragmentation. The Netherlands operates one of Europe’s strictest player protection regimes, yet problem gambling increased 24% in 2023. It enforces mandatory self-exclusion through CRUKS, yet high-spending players bypass it by gambling offshore. It raised taxes to fund public services, yet collected less money than before.

These contradictions aren’t unique to the Netherlands; they are inherent to trying to regulate a global industry with national tools. Every EU country faces some version of the same dilemma: protect citizens or preserve market revenue; liberalize to channel players into regulation or restrict to minimize harm. The Amsterdam restructuring represents one country’s attempt to thread that needle, but success depends on factors well beyond the KSA’s control: European coordination, payment provider cooperation, technological capabilities, and ultimately whether lawmakers can resist the temptation to pile on more restrictions every time a problem gambler’s story makes headlines.