Dutch gambling regulator Kansspelautoriteit (KSA) has raised the alarm over channelisation falling from 51% at the end of 2024 to 49% in the first half of 2025. In its 2025 annual report released on Tuesday it warned the illegal market had overtaken the licensed sector in terms of operator GGR.
Unlicensed operators now account for the majority of gambling spend in the Netherlands with GGR from licensed operators largely flat year-on-year in the second half of 2025, at €602 million.
The introduction of stricter player protection measures like deposit limites and an increase in gambling tax rates implemented in the last couple of years has led to the downturn in channelisation. The drop signals that nearly half of all gambling spend is leaking to unlicensed operators.
The regulator mandated deposit limits of €700 for players aged over 24 and €300 for those aged 18 to 24 in October last year. Originally designed to ensure safer gambling practices, the imposed measures instead slowed legal player spend.
Although the number of monthly player accounts reached 1.38 million in H2/25, losses per player account declined and overall legal revenue growth stalled. While player participation remained robust, deposit limits and compliance obligations are curbing per-player expenditure.
Channelisation slides as illegal spend overtakes
The KSA estimated the illegal online market at approximately €617 million in H1/25, slightly ahead of the €600 million recorded by licensed operators in the same period.
However the regulator also reported that channelisation, based on player activity, remained high at approximately 94% during 2025 as the majority of gamblers remain registered with licensed providers, but are increasingly spending elsewhere, either offshore or via illegal channels.
The KSA recorded a 34% year-on-year increase in reports of illegal gambling offers, rising to 2,005 cases in 2025. In response, it launched a new alliance-based initiative, Project Disconnect.
Michel Groothuizen, chairman of the KSA, noted that the authority would try to take on illegal supply in a new and innovative way. The initiative aims to disrupt the infrastructure supporting unlicensed gambling operators instead of pursuing individual sites case by case.
Early results include the near-elimination of paid search advertising for illegal sites on Google since August 2025 and the takedown of illegal .nl domains via registry SIDN. Major game suppliers have also shown commitments to geoblock content from unlicensed platforms following a B2B meeting in November 2025.
Enforcement measures intensified alongside reforms
The KSA fined five licensed operators a combined €8.6 million in 2025, largely for failures in duty-of-care obligations, following dossier-style investigations into cases of extreme player losses. The authority also imposed four fines, totalling €31.2 million, on illegal operators during the reported period.
Yet, the regulator flagged a statutory constraint. Under current law, fines cannot exceed 10% of an operator’s global GGR. Therefore, it has limited the KSA’s ability to penalise offshore operators proportionally. The regulator is in discussions with the Justice Ministry to amend the legislation.
The KSA also recorded an €11.1 million budget deficit for 2025. It was partly attributable to a €5.3 million shortfall in gambling tax receipts, which is a direct consequence of the deposit limits it introduced to protect players.
Original article: https://igamingbusiness.com/finance/netherlands-channelisation-drops-illegal-market-grows/
