LiveScore Group Exits Dutch Market Amidst Tax Hike and Regulatory Challenges
LiveScore Group Exits Dutch Gaming Market Amid Stiff Regulatory Pressures
Date: 12 November 2023
In a significant move reflecting the tightening grip of regulatory changes, LiveScore Group announced today that it will be ceasing its gaming operations in the Netherlands. This decision comes in response to a substantial increase in taxes imposed on online gaming operators in the country, which has been a growing concern for the industry.
Tax Increases Prompt Withdrawal
Beginning January 1, 2024, the tax rate for iGaming operators in the Netherlands will rise dramatically from 30.5% to 34.2%, followed by an increase to 37.8% the following year. Such a steep tax hike has proven to be the breaking point for LiveScore Bet, prompting the company to reevaluate the viability of maintaining its operations in a market that is quickly becoming less hospitable.
“Unfortunately, the planned tax increase means that this market is no longer viable commercially,” stated Sam Sadi, chief executive of LiveScore Group. Despite appeals from industry associations, including the Netherlands Online Gaming Association, advocating against the tax hike on the grounds that it would undermine the legal gaming sector, the government pressed ahead with the changes.
Warnings from industry experts, including research conducted by Atlas Partners, indicated that these new tax rates could drive operators out of the market. The land-based monopoly, Holland Casino, has already cautioned that the elevated tax rates could lead to unprofitable operations.
Industry Concerns Ignored
Despite the significant feedback from stakeholders, the Dutch government appears to have largely disregarded the industry’s concerns. Alan Littler, a Dutch gaming lawyer, remarked in September that the government seemed ‘deaf’ to the warnings from the sector about the adverse effects of such regulatory changes.
LiveScore Bet, which was among the first companies to enter the Netherlands’ iGaming market in 2021, is not alone in its withdrawal. The company becomes the second to exit since the original wave of operators launched, with Flutter Entertainment’s Tombola also having previously pulled out. The increasing number of regulatory restrictions has made it increasingly challenging for online gaming companies to maintain sustainable operations.
A Changing Regulatory Landscape
In recent months, the operational landscape for online gaming in the Netherlands has faced several hurdles, including a ban on untargeted advertising implemented in July of last year, and new requirements for implementing deposit limits and real-time monitoring of player activities that became effective on October 1. Additionally, further changes are anticipated as lawmakers continue to evaluate the effectiveness of the Netherlands Remote Gambling Act in achieving its intended objectives.
A recent review suggested that player protection measures still do not meet the desired standards, opening the door for additional regulatory changes that might further complicate operating conditions.
Reflecting on the situation earlier this year, Sadi noted the potential of overregulation to push smaller licensees out of the market. He acknowledged that the evolving regulatory framework could lead to a reconsideration of investment in the Dutch market, indicating that LiveScore Bet might not have entered the market under the current conditions.
Timeline for Withdrawal
LiveScore Bet has officially informed the Dutch regulator, de Kansspelautoriteit (KSA), of its intention to relinquish its operating license, with plans to cease operations on November 29. Account registration has already been deactivated, and players will no longer be able to make deposits starting the week of November 25. However, betting will remain available until the closure date, at which point remaining balances will be refunded.
The company has also initiated a confidential consultation process with employees who will be affected by its withdrawal.
“We have built a brilliant community of engaged customers and we will greatly miss our relationship with them,” Sadi expressed. He extended gratitude to the players, staff, and partners who have supported LiveScore Bet during its time in the Netherlands.
LiveScore Group will continue its operations in markets such as the UK, Ireland, and Nigeria, as the company navigates the challenges posed by differing regulatory environments.