How to open an online casino or bookmaker’s office in Latvia
Latvia, official name – the Republic of Latvia – the state in Northern Europe. The population as of January 1, 2018, was 1 934 379 people (149th place in the world). This is comparable to the population of a large European or Russian city. Nevertheless, the country is of interest to the gambling business. The main reason is that this business is legalized here.
The state has a monopoly on lotteries. Everything else can be done by private companies. Of course, after obtaining the appropriate licenses. At the moment, there are 14 operators in the country, and most of them are engaged exclusively in-ground establishments.
There are 6 casinos, 317 gambling halls and 57 points for betting. The total number of slot machines is 8,900. It is the slot machines that bring the lion’s share of the proceeds. Indirectly, you can estimate this share in the amount of taxes levied. Thus, in 2016 the gaming business earned 248 million euros. Of that, about 180 million came from slot machines. And only 7 million for the share of online gambling.
Features of Gambling Business Licensing in Latvia
Gambling business in Latvia is regulated by three basic laws:
- Gambling and Lotteries law;
- Law on Lotteries and Gambling Tax and Fees;
- Law On Lotteries of Goods and Services.
The Law on Lotteries and Gambling tax and the fee was adopted in 2006. All processes are controlled by the Gambling and Lotteries Supervision Inspectorate of Latvia (Izložu un azartspēļu uzraudzības inspekcija). Despite the adoption of the law, for a long time business has preferred grey schemes. The fact is that obtaining a license is associated with several serious restrictions. Firstly, a company must have a charter capital of at least 1.4 billion euros. Secondly, 51% of the shares of this company should be owned by Latvian shareholders.
Latvian law defines the following types of games as legal:
- slot machines;
- card games;
- gambling, available on the phone.
Online gambling in Latvia
Because obtaining a license for online sites is subject to the same financial and organizational restrictions as for terrestrial institutions, the number of legally operating sites in the country does not exceed ten. But they manage to earn money, as regulators try to block popular sites by blacklisting them. At present, there are more than 1000 sites on this list.
Specifics of taxation
Operators pay an annual tax on each game object. In the case of terrestrial institutions, the fee is fixed and is charged from each table for the card game, slot machine or betting point totalizator. Thus, for each table of roulette casino pays about 17 thousand euros a year. As for online gambling, the operators are obliged to pay 10% of gross income.
Also, for online gambling sites in 2017 introduced a license fee for live casinos in the country, which is € 400 000 per year. This fee was introduced by the Parliament of Latvia, which insisted that live casinos are in fact not too different from casinos in ground-based establishments.
By the way, the country is considered the world leader in the field of “live dealers” for online casinos. This feature is due to several factors: the pleasant appearance of Latvian girls, their good knowledge of European languages and peculiarities of the local labor market.
In recent years, the government has been trying to tighten taxation requirements. For example, in 2018 Latvia adopted amendments, which imply the introduction of a tax on winnings. This quickly led to an outflow of players from land casinos in Riga and other major cities in the country. If previously land-based casinos earned good money from foreigners, now these players go to other countries for entertainment.
As a result, instead of the expected increase in tax revenues, the Latvian authorities have received a natural decrease in their revenues.
In 2017, the Riga City Hall decided to close down several casinos located in the historic city center. By 2021, the city plans to close more than 40 land-based casinos, not only in the center but also on the outskirts. Only those casinos, which are located in several five and four-star hotels, will continue their work. These measures will also hit the gambling industry, but will not affect the online segment.
Despite its low population size, Latvia is a promising market for gambling. It is largely due to the absence of bans on such activities and its convenient location, which attracts a large number of tourists. The government is still experimenting with taxation and licensing schemes for land and online casinos and betting offices. An ideal scheme that would suit both parties has not yet been found.
The land-based gambling industry in the country is going through some bad times. And there are no loyal laws in place for the online segment yet. But it is encouraging that, unlike many other European countries, there is still no talk about a complete ban on gambling in Latvia.