Dutch gambling operator JVH Gaming, which runs well-known arcade brands such as Jack’s Casino, Flash Casino, and Flamingo Casino, has announced significant restructuring plans.
As a result of rising gambling taxes and increased operational costs, the company plans to close 25 of its outlets, eliminate the Flamingo Casino brand entirely, and reduce its workforce at the headquarters, according to a report from Financieele Dagblad on Wednesday.
The move comes as the Dutch government continues to implement a controversial phased gambling tax increase aimed at generating €200m annually for the treasury. The tax rate, currently set at 30.5%, is scheduled to rise to 34.2% in 2025 and will reach 37.8% by 2026.
While the government has opted for a staggered approach to give licensees time to adapt, the decision has been met with widespread concern across the regulated gaming sector.
Erik Olders, CEO of JVH Gaming, expressed deep frustration over the government’s decision, describing it as a “bitter pill” for the industry.
“This move is necessary for us to deal with the pain,” Olders said, emphasising the combined pressures of increased taxes, rising costs for rent, energy, and wages, as well as the lingering impact of the Covid-19 pandemic.
The closures will predominantly affect outlets operating under the Flash Casino brand. Flamingo Casino locations will be phased out entirely, marking the end of that brand’s presence in the Dutch gambling landscape. Despite reporting sales of €184m last year after deducting gambling taxes, the company finds itself forced to scale back its operations.
Sector-wide impacts
The challenges faced by JVH Gaming are not isolated. Earlier this year, the Janshen-Hahnraths Group, operators of the Fair Play Casino chain, announced a workforce reduction of 100 jobs, citing financial losses over the past two years.
Additionally, the state-owned Holland Casino Group disclosed plans to shutter its iconic Zandvoort branch, the country’s oldest casino, by 2024.
The broader gambling sector has voiced strong opposition to the tax hikes. Trade associations like the Dutch Online Gambling Association and others have highlighted the potential unintended consequences of the policy.
These include the erosion of the regulated gambling market, which may drive consumers toward unlicensed and riskier platforms, undermining government objectives of consumer protection and crime prevention.
Research commissioned by the Dutch government itself warned of adverse effects from the tax hike, including reduced market participation by licensees and increased illegal gambling. Analysts predict a decrease in tax revenue in the long term as the regulated sector struggles to compete.
Furthermore, an uptick in illegal gambling could lead to higher societal costs related to fraud, addiction, and crime.
While the phased implementation reflects some acknowledgment of these risks, critics argue that the measures fail to address the fundamental challenges operators face.
The ever-evolving market
The Netherlands has an intrinsic relationship with gambling that dates back centuries. However, in 1976, the state-owned Holland Casino was established, operating under a government-granted monopoly to manage brick-and-mortar casinos.
The first Holland Casino opened in Zandvoort in 1976, providing a controlled environment for casino gambling. Over time, the company expanded to include multiple locations across the country, offering table games and slot machines.
Companies like JVH and Janshen-Hahnraths capitalised on the increased popularity, opening numerous locations under brands such as Jack’s, Flash, and Fair Play.
These establishments offered a more casual gambling experience compared to traditional casinos.
The arrival of the public internet in the late 1990s and early 2000s brought new challenges and opportunities. Many Dutch residents began participating in unregulated online gambling platforms, prompting the government to consider modernising its laws.
However, progress toward regulation was slow, and the market remained in a legal grey area for years.
A major milestone came through the Kansspelwet op afstand (Remote Gambling Act) in April 2021. This legislation, postponed due to Covid-19, legalised and regulated online gambling for the first time, allowing licensed operators to offer their services in the Netherlands.
The act emphasised consumer protection, responsible gambling, and combating illegal operators. It also introduced strict advertising rules and required operators to contribute to addiction prevention efforts.
Elsewhere, some Dutch lawmakers want to end online gambling completely.