Latvia, officially the Republic of Latvia, is located in Northern Europe and is a member of the EU. Latvia is a Baltic country, and many of its laws follow the legislative systems of neighboring European nations. Gambling in Latvia is regulated in a manner similar to that in other Northern European regions.
Latvia legalized gambling in 1998, and the main piece of legislation governing the industry is the Law on Gambling and Lotteries. As a former member of the Soviet Union, Latvia did not embrace legal gambling until it gained independence. In the following years, Latvia’s gambling industry evolved into a regulated sector. Currently, the Lotteries and Gambling Supervisory Inspection oversees the gambling industry in Latvia.
Because Latvia is part of the EU, the Union’s gambling directives also apply to its laws. Online gambling was legalized in Latvia in 2006, and operators that wish to conduct online casino or betting activities must obtain a license from the Lotteries and Gambling Supervisory Inspection.
Online gambling was banned for several months in 2020, but the ban was lifted in 2021. Currently, Latvians can legally place wagers on several licensed online gaming and betting sites. Latvian players should avoid unregulated online websites because they can be penalized with an administrative fine.
History of Gambling in Latvia
Up until 1991, Latvia was part of the USSR, where most gambling activities were completely banned. After gaining sovereignty, gambling activities gradually became legal, with the first legislation introduced in 1998. That said, the first land-based casinos opened in 1991 and operated for several years without regulation.
In 1998, the Law on Gambling and Lotteries was enacted and became the main legislation regulating the gambling industry. The law also established the Lotteries and Gambling Supervisory Inspection, the gambling regulator responsible for licensing operators and overseeing the industry.
Under this law, lotteries, casino games, and sports betting were legalized in Latvia. However, the legislation has been amended several times so that it can properly regulate the evolving gambling industry. Moreover, after Latvia joined the EU in 2004, it had to comply with the gambling directives set up by the EU.
In 2006, an amendment to the Law on Gambling and Lotteries also legalized online gambling in the country. The changes enabled operators to apply for online gambling licenses issued by the Lotteries and Gambling Supervisory Inspection.
After online gambling became a regulated industry in Latvia, the government started taking measures to prevent unlicensed virtual gambling. Since April 2020, banking institutions and ISPs have been required to notify the government about Latvians who attempt to initiate payments to or from unlicensed gambling websites. Individuals caught depositing to or withdrawing from unregulated gaming or betting sites must pay an administrative fine of €350 per transaction. If players profit from gambling on unlicensed websites, they may face additional charges because this can be considered tax evasion.
Because of the COVID-19 pandemic, Latvia completely banned online gambling between April and June 2020. The government introduced the ban to prevent Latvians from gambling away their money during a period of rising unemployment and lockdowns. Online gambling was allowed again in 2021 when the ban was lifted.
Gambling Regulations in Latvia
After Latvia gained independence in 1991, gambling activities in the country were largely unregulated. In 1998, the Law on Gambling and Lotteries was implemented, legalizing gambling and establishing rules to regulate the industry. This remains the primary legislation governing gambling in Latvia, although it has been amended several times over the years.
Under the Law on Gambling and Lotteries, operators that wish to offer gambling within Latvia must obtain a license from the Lotteries and Gambling Supervisory Inspection. The regulatory body was also created when the law was enacted in 1998 and is responsible for overseeing licensed gambling operators.
According to the Law on Gambling and Lotteries, gambling is defined as a game where a person may fully or partially win a prize, with the outcome depending on chance or a previously unknown condition, provided that a bet has been placed. Gaming machines that offer only free games as prizes or award other items with a monetary value of no more than €15 are not considered gambling. Machines that offer cash prizes, however, are classified as gambling.
The legal gambling age in Latvia is 18. Nevertheless, many land-based casinos admit only players who are 21 or older. Online casinos follow the statutory limit and accept players aged 18 or above.
Online gambling was legalized in 2006 through an amendment to the Law on Gambling and Lotteries. Operators must obtain a license from the Lotteries and Gambling Supervisory Inspection to run online casinos in Latvia.
ISPs in Latvia block unlicensed gaming and betting websites. In 2014, the country adopted a blacklist model, adding unlicensed operators to the list and permanently blocking their access to the Latvian gambling market.
Anyone who provides gambling services without complying with the law faces a fine of €200. Violations related to one-time or public lotteries may result in a penalty of €200 to €500. Additional fines for other breaches are detailed in the latest amendment to the law.
In 2020, Latvia introduced further regulations to curb illegal online gambling, requiring financial institutions and ISPs to notify the government about attempts to initiate payments to or from unlicensed gaming and betting websites. Individuals who conduct gambling-related transactions at unregulated sites are subject to a penalty of €350 per transaction.
Land-Based Casinos and Gaming Halls in Latvia
Other Forms of Gambling Legal in LatviaOnline Gambling in Latvia
In 2006, Latvia legalized online gambling, allowing operators to apply for a remote gambling license from the Lotteries and Gambling Supervisory Inspection. Although there are still not many licensed online casinos, Latvians should be cautious of unlicensed operators. The country uses ISPs to block unlicensed gaming sites and place them on Latvia’s blacklist. However, players who are found to gamble on unregulated online casinos will face a financial penalty.
Initially, online casinos were not strictly regulated, and there were no serious consequences for either unlicensed operators or Latvians who played on unregulated sites. However, the blacklist system was adopted in 2014, severely limiting the number of unlicensed online casinos in the country.
Despite the government’s efforts to restrict access to unlicensed sites, many Latvian players used VPNs to circumvent the blocks. However, since April 2020, Latvian financial institutions have been required to track transactions to or from unlicensed gambling sites and notify the government about individuals participating in illegal gambling activities.
Players who are found to have initiated payments to or from unlicensed gaming or betting sites will need to pay an administrative fine of €350 per transaction. Therefore, if a player makes multiple payments to or from such websites, they will face very hefty fines.
As already mentioned, operators who wish to offer online gambling services must obtain a license from the Lotteries and Gambling Supervisory Inspection. The licensing process falls under the remit of the authority’s Legal Department. In addition to issuing licenses, the regulator sets minimum RTP requirements for the different games offered by online casinos. Those who have obtained a license from the Lotteries and Gambling Supervisory Inspection must renew their registration with the authority every year.
Gambling Regulator and Licensing Process in Latvia
Operators who wish to legally offer gambling activities in Latvia are required to obtain the corresponding license from the Lotteries and Gambling Supervisory Inspection. The agency licenses both land-based and online gambling activities in Latvia.
Companies must meet several requirements before they can apply for a gambling license in Latvia. Operators must register their companies in Latvia and have paid-up share capital of at least €1,400,000. Foreign shareholders may hold no more than 49% of the company’s share capital. However, this condition does not apply to investors who are residents of EU member states, EEA countries, or countries of the Organization for Economic Cooperation and Development.
Companies that apply for a gambling license from the local authorities in Latvia must include the following documents in their application forms:
- A copy of the financial statements for the last four quarters, showing the company’s economic activity during that period, provided it has engaged in commercial activities
- Data on the company’s credit liabilities, including the amounts owed and the repayment terms applicable on the date of submission
- Information about the source of funds and property that have been invested in the company’s share capital
- A business plan for the upcoming year, listing the types of gambling to be offered, the expected income and operating costs, and the intended use of the generated profit
- A statement confirming that the members of the supervisory and management boards, as well as the auditor, meet the requirements imposed by the Law on Gambling and Lotteries
Gambling Taxes in Latvia
Latvian players are not required to pay taxes on the winnings they have accumulated through legal gambling. If their cumulative winnings for the year exceed €3,000, however, the amount will be added to their taxable income.
Although players rarely pay taxes on their winnings, gambling operators must pay gambling taxes at rates that depend on the type of gambling they offer. The gambling taxes in Latvia are determined by the Law on Lottery and Gambling Tax, which was amended in 2021.
The operation of card and dice games or roulette tables requires a fixed annual tax of €28,080 per table. The other type of fixed annual tax is levied on gambling machines, with operators asked to pay €5,172 per machine. Operators conducting games of chance by phone must pay a tax of 15% on the revenue generated from these games. Sweepstakes and betting also incur a 15% tax on the revenue generated.
Bingo games, lotteries, and instant lotteries require operators to pay a gambling tax of 10%. The tax base for bingo games is the revenue generated from conducting the games. For lottery games, the tax base is the profit from ticket sales. Operators conducting online gambling pay a 10% tax on the revenue generated.
About 75% of gambling taxes go to the state budget, while the remaining 25% is paid to the local governments where the gambling activities are conducted. Compared to other European countries, Latvia’s gambling tax rates are reasonable and can even be considered average worldwide.
Closing Thoughts
Gambling activities started becoming popular in Latvia after the country gained its independence in 1991. In the following years the industry was not properly regulated, but in 1998 the Law on Gambling and Lotteries was enacted, legalizing and regulating most forms of gambling in Latvia.
The Law on Gambling and Lotteries is still the main piece of legislation that governs gambling activities in Latvia. That said, it has been amended several times over the years to ensure better regulation of the industry. Under the law, operators that wish to conduct gambling or local lottery activities must obtain a license from the Lotteries and Gambling Supervisory Inspection.
Online gambling was also legalized in 2006, with the same licensing authority responsible for authorizing operators to conduct online casino or sports betting activities in Latvia. In recent years, the Latvian government has taken serious measures to restrict unlicensed online gambling, imposing heavy fines on players who are found to gamble on unregulated sites.