LiveScore Group CEO: Increased regulation could force us to exit the Dutch market

LiveScore Group’s CEO has admitted that LiveScore Bet could be withdrawn from the Netherlands as the company grapples with potential harsher regulations coming down the road.

Sam Sadi said his company could be “forced to consider an exit” from the Dutch market if online slots and gambling ad bans come to fruition, as well as a steep increase in betting and gaming taxes.

The country’s right-wing coalition government plans to take the tax on gross gambling revenue (GGR) from 30.5% to 37.8% from 1 January 2025, a move that has been slammed by the industry’s trade body, the Dutch Online Gambling Association (NOGA).

The coalition parties forecast the 7.3 percentage point increase to generate an additional €202m (£170m) from both the land-based and online gambling industry.

Yet Sadi told EGR on the sidelines of iGB Live in Amsterdam: “We are struggling with the change in regulations, and new potential taxes and advertising bans coming in [but] we are waiting to see a little bit more clarity in the market so that we can plan our investments accordingly.

“If they do implement a new tax rate, it is going to be almost impossible for a single-digit market share operator to be sustainable and profitable. And it will certainly eliminate any new market entrants unless they deploy an enormous amount of capital.

“This is a detriment to the customer; it eliminates choice and eliminates any innovative startups coming into the market. It also consolidates the top of the market to one or two operators.”

Pressed on whether LiveScore Bet could be pulled from the market, Sadi responded: “It would be our job to re-evaluate. We look at the long term. We are not trying to be profitable immediately but there needs to be a model that tells us we are going to be profitable at some point.

“If that point means we need to go from the single-digit market share that we have today to 15% market share and would require hundreds of millions in capital – and that deployment is becoming difficult because of the advertising ban – then it’s a battle that we can’t win.

“So, therefore, we will be forced to consider and exit, unfortunately.”

He added that 37.8% would be “close to not possible” to operate a digital betting and gaming business in the Netherlands, unless you occupy a podium position.

“It depends on the scale you have; obviously if you command 30% to 40% market share then you are able to absorb a lot more of these incremental costs.

“Legislators and regulators usually focus on channelisation and whether these increases will lead the market towards offshore operators, but an unintended consequence is that it consolidates the market because there are fewer operators able to absorb these costs.”

LiveScore Bet was among the first wave of 10 operators to launch in the Netherlands when the regulated online market went live in October 2021.

However, licensed firms have faced regulatory headwinds since including a ban on untargeted online gambling marketing, which came into effect on 1 July 2023 and prohibited all TV and print ads.

A year later, operators were barred from using celebrities and influencers in their marketing, while in April of this year MPs voted to ban all untargeted advertising and high-risk games of chance, in other words online slots.

Speaking to EGR just prior to him stepping down as director of NOGA on 1 July, Peter-Paul de Goeij blasted the planned tax hike to 37.8% as “completely unhinged” and “detached from reality”.

“Add another 7.3 percentage points to tax and I’m convinced it will be disastrous for the legal market and consumer protection,” he said.

Earlier this month, the Dutch government announced that Teun Struycken would replace Franc Weerwind as the new gambling minister.