Facts on regulation
Balancing the Odds, UK-Netherlands gambling regulation
Channelisation and the Risk of Regulatory Push in the UK and the Netherlands (2021–2025)
Intro
This article compares regulatory and policy changes in the iGaming industry in the UK and the Netherlands from 2021 to 2025, evaluating how these shifts have influenced player behaviour and the distribution of activity between licensed and unlicensed gambling operators.
Channelisation—the proportion of gambling that occurs with licensed operators—is the key metric for assessing the effectiveness of regulatory frameworks, revealing how well policies protect players, preserve market integrity, and maximise public revenue.
A comparison of the UK and Netherlands gambling regulations from 2021 to 2025.
Why Compare the UK and the Netherlands?
The UK and the Netherlands stand out for their contrasting regulatory strategies. The UK operates one of Europe’s oldest and most adaptive gambling regulation systems, with nearly two decades of centralised licensing and oversight under the Gambling Act 2005 and the UK Gambling Commission.
The Netherlands, by contrast, legalised online gambling only in 2021, rapidly implementing a strict regime overseen by the Kansspelautoriteit (KSA) with high taxes, comprehensive advertising bans, and tight player restrictions. This divergence enables direct comparison between a mature, flexible model and a recently established, enforcement-heavy structure—critical for understanding regulation-market dynamics across the EU region.
Both jurisdictions pursue the same goal: to maintain consumer protection and keep gambling activity in the regulated sector. In practice, strict measures—such as high taxes, advertising bans, and deposit limits—have shown a risk in creating “regulatory push,” where players migrate to unlicensed offerings and undermine public health and tax base.
Channelisation—Benchmarking Regulatory Effectiveness
Channelisation rates directly measure the share of gambling with licensed providers. Higher channelisation signals effective regulation and greater consumer safety; lower rates reveal growing leakage to the illegal market and pose risks of economic and social harm.
United Kingdom: Strong Channelisation Amid Statutory Levy Reform
In 2025, the UK introduced a statutory gambling levy of 1.1% of GGY for online operators (with tiered rates for other sectors), formalising mandatory funding for prevention, research, and treatment of gambling-related harm. At the same time, new customer onboarding measures were strengthened, including deposit limit prompts and enhanced affordability checks, aiming to boost early consumer protection and responsible gambling engagement.
Despite tightening regulation, the UK continues to demonstrate one of the highest channelisation rates in Europe. Industry data and independent analyses place legal market share between 87% and 97%, with the Frontier Economics report (September 2024) — commissioned by the Betting and Gaming Council (BGC) — estimating approximately £2.7 billion in annual stakes placed with unlicensed or offshore gambling operators.
This black market volume represents roughly 2.1% of total annual stakes in the online sector. While the UK’s regulated framework has so far maintained a high legal market share, industry and regulators alike caution that growing regulatory friction — particularly affordability measures and marketing restrictions — could push more players toward unlicensed channels if not carefully calibrated.
REGULATORY PERSPECTIVE
“We do have high channelisation in the UK, it’s the benefit of a mature market. But what we have seen is even in a mature market, the black market risk is still present and growing.”
— Grainne Hurst, Betting and Gaming Council, January 2025
Netherlands: Restrictive Measures and Surging Illegal Activity
The Netherlands introduced its Remote Gambling Act (Wet Kansspelen op Afstand) in October 2021, marking the first time that online gambling was formally legalized and regulated in the country. The legislation aimed to channel at least 80% of Dutch online gambling activity into the licensed market, combining strict consumer protection rules with a newly established licensing system overseen by the Kansspelautoriteit (KSA).
Four years later, that policy goal is under severe pressure. In 2025, the Dutch government moved to further restrict advertising, tighten player limits, and raise gambling taxes from 30.5% to 34.2% of GGR, with a further increase to 37.8% set for 2026. At the same time, the KSA was granted expanded enforcement powers, including broader access to data and stronger supervisory authority over both legal and illegal operators.
But instead of strengthening the regulated market, these measures have coincided with a sharp shift toward illegal gambling platforms. According to the KSA’s biannual Monitoring Report (October 2025), only 47–49% of total Dutch online gambling spend remains within the licensed sector. The illegal market reached an estimated €617 million in the first half of 2025—surpassing the legal market’s GGR of €600 million for the first time since legalization. This is the first time that this has happened.
Earlier estimates from H2 Gambling Capital had placed the illegal market at around €400 million, but the official data confirms a sustained upward trend since 2023. Regulators and industry analysts point to the restrictive regulatory climate—particularly the near-total ban on gambling advertising and bonus incentives—as a key factor pushing players toward unlicensed operators.
REGULATORY PERSPECTIVE
“This downward trend may be explained by players shifting towards illegal websites following the introduction of new rules. That is worrying because players on the illegal circuit are less well protected.”
—KSA Biannual Monitoring Report, October 2025
Key insights
Both countries aim to protect players and maintain market integrity but now confront sharply different outcomes. As regulations strengthened, the UK’s flexible, incremental reforms have sustained one of the world’s highest channelisation rates, while the Netherlands’ stricter EU-compliant approach coincides with declining channelisation and rapid growth of the illegal market.
Channelisation rates for the Netherlands (2024–2025) represent the percentage of total gambling spend with licensed operators (“by spend”), not by number of players. See KSA Monitoring Report, October 2025.
The infographic below summarises the key regulatory changes and channelisation rates in both markets from 2021–2025. See footnote for channelisation metric definitions. See footnote for channelisation metric definitions.
Conclusion
The UK has maintained one of Europe’s strongest channelisation rates between 2021 and 2025, with 87–97% of gambling spend remaining in the licensed market, despite around £2.7 billion still flowing annually to offshore operators.
In contrast, the Netherlands has seen legal market share drop to 47–49% in 2025, with illegal gambling surpassing regulated GGR for the first time — a clear sign of how tightening regulation can shift players to unlicensed markets.
Further Reading
Evaluation of regulatory tools for enforcing online gambling rules and channeling demand (European Commission)single-market-economy.europa
Channelling and taxation in European online gambling markets (PMC, 2025)pmc.ncbi.nlm.nih
KSA: Biannual report and illegal market update, report
EXPLORE ARTICLE SERIES
European Gambling Regulation in Focus
Article 1 of 4 in a series exploring ”European gambling regualtion in focus”: this article compares regulation in UK – Netherlands between 2021 – 2025. Balancing the odds, UK – Netherlands Gambling Regulation
“Eurpoean gambling regulation in focus” is a focused series examining how evolving gambling policies are reshaping legal markets, player behaviour, and black-market dynamics. Drawing on data from the UK, the Netherlands, and across the EU market, it highlights the real-world impact of regulatory ambition on channelisation and market stability.
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European Gambling Regulation in Focus: A four part series
