The regulated gambling market in the Netherlands is going through a structural crisis. According to the 2025 annual report by the Kansspelautoriteit (KSA), the Dutch regulatory body, the channelization rate — i.e., the proportion of total gambling expenditure directed to licensed operators — fell from 51% recorded at the end of 2024 to 49% in the first half of 2025.
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It is the first time, since the regulation of the online market, that the sum of revenue associated with unlicensed operators exceeds that of the authorized segment.
Unlicensed operators generated approximately $617 million in the first half of the year, compared to $600 million recorded by authorized operators in the same period.
Player protection measures behind the growth of the black market
The paradox exposed by the KSA report is uncomfortable for proponents of strict regulation: the very measures designed to protect players ended up pushing them out of the legal system.
In October 2024, the regulator imposed monthly deposit limits of $700 for players over 24 years old and $300 for those between 18 and 24 years old. This was coupled with an increase in the tax burden on operators. Both measures reduced the attractiveness of regulated platforms for a significant portion of active players.
The result was a stagnation of legal revenue: although the number of monthly active accounts reached 1.38 million in the second half of 2025, losses per account decreased, and the overall revenue growth of the authorized sector halted.
94% of players remain registered on legal platforms, but spend elsewhere in the Netherlands
One of the most striking data from the report is the gap between formal participation and actual spending. The KSA estimates that, measured by registered player activity, channelization remained around 94% during 2025: the vast majority of Dutch players have an account with at least one licensed operator.
However, a growing portion of that spending is diverted to foreign or illegal platforms. In other words, players maintain their legal account but allocate a significant part of their money to unlicensed sites, where deposit limits do not apply.
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Project Disconnect: attacking infrastructure, not just illegal sites
Given this scenario, the KSA launched a new approach initiative called Project Disconnect. Instead of individually pursuing each illegal site — a strategy that has proven inefficient across Europe — the initiative aims to dismantle the infrastructure that supports unlicensed operators.
Michel Groothuizen, chairman of the KSA, explained that the authority will try to combat illegal offerings in an innovative way. Among the first concrete results are the practically complete elimination of paid search advertising for illegal sites on Google since August 2025 and the removal of illegal .nl domains through the SIDN registry. Additionally, major game software providers agreed to geographically block content from unlicensed platforms after a sectoral meeting held in November 2025.
Reports of illegal gambling offers registered a year-on-year increase of 34%, with 2,005 cases documented in 2025.
Million-dollar fines for both legal and illegal operators
Regulatory tightening was also reflected in sanctions. During 2025, the KSA fined five licensed operators a total of $8.6 million, mainly for non-compliance with their due diligence obligations, following investigations into cases of extreme player losses. Simultaneously, it imposed four fines on illegal operators totaling $31.2 million.
However, the regulatory body acknowledges a relevant legal limitation: current legislation prevents fines from exceeding 10% of an operator’s global gross revenue, which significantly reduces the deterrent effect on large international platforms. The KSA is in dialogue with the Dutch Ministry of Justice to modify this cap.
A budget deficit reflecting the cost of restrictions
The fiscal impact of the measures adopted quickly became visible. The KSA closed 2025 with a budget deficit of $11.1 million, of which $5.3 million corresponded to lower-than-projected gambling tax revenue, a direct consequence of the deposit limits that the body itself introduced.
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