The burden of taxation on arcades in the Netherlands is a major concern, according to Jan Schiffelers, CEO of the Janshen-Hahnraths Group.
In 2008, the Dutch government introduced a new tax rate of 29 per cent on GGR, which, in addition to the smoking ban that came into effect at the same time and the effects of the economic downturn, had – and continues to have – a significant impact upon the gaming business.
The single site market has seen a decrease, while the arcade market was down around five per cent across the board last year. The effect of this, of course, is that manufacturers and suppliers have fewer resources to invest in designing new games.
Schiffelers, whose company operates 43 arcades under the Fair Play brand, told InterGame that the existing regulatory regime and level of taxation are stifling the industry.
“At the moment, we have to be aware that in the Netherlands we have good regulations, but if the leash is too tight we cannot operate,” Schiffelers said. The danger, he warned, is that with such “heavy burdens” being placed on the sector, it could lead to a widening of the illegal gambling market.
The Netherlands is planning to open its online gaming market in 2015 and has indicated that the tax rate for online gaming businesses will be 20 per cent.
“We have a lot of legal fights concerning taxation,” Schiffelers said. “We see the 29 per cent tax rate as really excessive, disproportionate and unfair.”
There are also concerns about whether such a tax regime infringes upon the industry’s economic freedom to operate profitably.
“We simply see the tax as being too high,” he added.
