Robin Harrison and Ed Birkin recently resumed their discussions following iGB L!VE, sharing insights related to the World Cup and developments within Europe. They began by examining a significant shortfall in the anticipated revenue from the Netherlands’ gambling tax hike.
During the World Cup, H2 has monitored prediction market trends. In an interesting turn of events, the Democratic Republic of Congo emerged as the most backed country that ultimately did not win the tournament. In contrast, France, Spain, and Portugal were the leading favorites among those expected to secure victory.
H2 also discovered compelling data about the matches that prompted the highest number of losing trades. Their findings reveal notable commonalities in these matches, which surprisingly seem to favor traditional sportsbooks over prediction markets, indicating a noteworthy gap in market performance.
Turning to the Dutch tax situation, the Netherlands implemented a gambling tax increase that will rise in two stages: from 30.5% to 34.2% beginning January 2025, and subsequently to 37.8% in January 2026. The Dutch Treasury had anticipated these increases would yield an additional €108 million in 2025 and €216 million in 2026. However, the actual figures fall drastically short, with an expected extra €2 million for 2025 and a mere €57 million for the following year. Ed pointed out that the disappointing revenue cannot solely be attributed to the increased tax rate; other factors, including new deposit limits, advertising restrictions, and a drop in revenue following the Euro 2024 event are also contributing to a diminishing taxable base.
The implications for physical gaming venues have also been stark, with an 11% year-over-year decline in visits to casinos and gaming halls, leading several operators to close their doors. The discussion illustrates that tax hikes often produce results that differ from governmental expectations.
In a separate European context, Robin and Ed examined Ireland's new licensing framework under the GRAI that took effect on July 1. While 89% of online betting is conducted onshore, this only accounts for 35% of the overall market, with the rest of the iGaming activities remaining offshore and largely unregulated.
Companies like Pragmatic Solutions are already operational to assist operators as they navigate this transition. H2 also provided some estimates concerning the potential value of the market as regulation progresses further.
Lastly, Robin highlighted the Africa Summit at iGB L!VE, which convened regulators from nations like Nigeria, South Africa, and Kenya, as well as industry organizations such as the African Tax Administration Forum. During the event, a session organized by the African iGaming Alliance addressed sustainable taxation, player protection, and coordinated efforts for an Africa Safer Gambling Week.
Ed, who moderated a tax panel during the summit, posed a critical question regarding the industry's stances against high tax rates in light of operators managing or evading such costs in certain markets. The full Right to the Source series contains additional data and analyses on these topics.
