The gaming market in the Netherlands has had a bad time lately. With the introduction of a smoking ban and a rise in taxation Helen Fletcher finds out what some of the companies involved in the market see for the country's future
July 2008 was a tough month for the gaming industry in the Netherlands. Not only was a smoking ban inflicted on all indoor public places but tough new laws on taxation of gambling machines was imposed.
The threat of higher taxation levels has seen the Dutch market come to a standstill for the past year and now the threat has become a reality there is much doubt over how prosperous the future gaming industry can be. At present, almost all Dutch manufacturers sell 90 per cent of their machines to the export market.
There has also been a shift in the type of player in the Netherlands, which is having a knock-on effect on the market. “Because of the ageing of the traditional player there has been a need for another product that attracts the new generation of players,” said Eveline Janse of testing company NMi.
“We have noticed a tendency towards video games instead of the reel games or a combination of the two and there is definitely still the need for more excitement like skill features - the problem we have is that they are still not allowed by law.
“If you want a professional and legal market, another product line should be made possible by changing the regulations,” Janse continued. “There should be more of a black box approach instead of a summary of dos and don’ts.”
On behalf of Suzo, John Carroll adds to this saying: “Because of this new taxation customers of manufacturers will no longer invest as much. Before the new law they were able to deduct the 19 per cent BTW (Dutch VAT) of their investments of machines. Now it’s not possible so machines are 19 per cent more expensive. The new law will result in a lot of older machines in the market, which will need to be serviced more often.
“I have a feeling that it will be very hard for operators to keep their heads above water and a lot of them will disappear. Arcades will go on but in another kind of organisation.”
Operators of the 38,500 machines in the Netherlands now have to pay 29 per cent on the cashbox returns of the machines in tax. The Dutch Government removed VAT from the machines, but the net effect is to triple the amount which the government takes from the cashbox.
Although owned by the government the casinos are in the same position and a Holland Casino spokesperson told InterGame: “The new taxation will cost us millions. To guarantee our continuing operations, strategic changes must be made and we are facing an important and challenging year.”
It could be considered that the casino sector did, however, get a lucky escape as the government had initially proposed 40.85 per cent tax on both tables and slots but in the end settled on 29 per cent for this sector as well.
However, it is not all doom and gloom and for UK-based Inspired Gaming, the new level of tax will have a positive affect on its new partnership with Holland Casino.
Norman Crowley, joint chief executive officer at Inspired, told InterGame: “Holland Casino is looking at new and creative ideas to bring gaming to a wider audience and innovative approaches to content development and presentation to the customer.
“The Netherlands also acts as a perfect showcase for the variety and flexibility of Inspired’s products and system of delivery,” continued Crowley. “We have exciting variants to table games such as roulette, baccarat and blackjack as well as the ability to introduce fresh content in the form of softer play-for-fun style content and even highly realistic virtual sporting events such as football, F1 motor racing and horse racing.”
So what would those involved in the market like to see changed and what could it mean for the industry if the tax stays at the current rate of 29 per cent?
“It is going to be a hard time and a lot of companies will not be able to stay afloat,” said Carroll. “A standard new tax per new machine would be a good alternative – a system which is currently used in many other countries.”
And for newcomers to the market? According to Crowley, the market is now seeing how Inspired’s gaming platform and content offerings can deliver solutions flexible enough to fit changing environments and the Netherlands is typical of this. “With the new taxation legislation and the smoking ban introduced in July, significant challenges have been created for the industry and its participants.
“Holland Casino will expand the appeal of its gaming offerings and the size of its customer base to rise to these challenges. Inspired will help Holland Casino execute such an expansion.”
