Croatia, officially known as the Republic of Croatia, is a small European country that is also a member of the EU. It was not until 1991 that Croatia was recognized as an independent state, which is why the country’s legislative system is fairly new and still evolving. That said, Croatia has managed to establish solid regulations for its gambling industry.
Even when Croatia was part of the Socialist Federal Republic of Yugoslavia (SFRY), gambling was a legal and regulated industry in the republic. In fact, Croatia was one of the first members of the Eastern Bloc to recognize and regulate gambling as a legal activity in the 1960s. After Croatia gained its independence, the gambling industry expanded even further, with numerous tourists flocking to the country’s hotel-based casinos.
In addition to land-based gambling, Croatia has also legalized online gaming and betting activities. That said, there are some restrictions on the types of games available to Croatian players online. Nevertheless, both locals and tourists visiting Croatia have plenty of gambling options to enjoy online and at land-based gaming facilities.
History of Gambling in Croatia
Since Croatia was one of the six republics that constituted the SFRY, its gaming industry was fully governed by the laws imposed by the socialist federation. Sports betting was allowed in a very limited form known as “sports forecasting,” and bettors could place their wagers only at state-owned kiosks.
When Croatia became an independent country in 1991, the so-called tourist gambling spurred exponential growth of the gambling industry. It is no surprise that most casinos in the country operate in conjunction with hotels mainly located along Croatia’s coastline. Nowadays, the country boasts more than 20 brick-and-mortar casinos that cater to both locals and foreign tourists.
While gambling was legal in Croatia, the way the industry was regulated remained fairly unclear until 2014, when the gambling law Zakon o igrama na sreću was passed. It is currently the primary piece of legislation governing the gambling industry in Croatia and sets the rules for all gambling activities in the country.
Shortly after Croatia gained its independence, sports betting also launched. With the implementation of new laws, private companies were allowed to operate betting shops across the country. The first two operators to take advantage of this opportunity were Prva Sportska Kladionica and Sport Tip, both of which are now among the biggest betting companies in Croatia.
Gambling Regulations in Croatia
Gambling has been a legal form of entertainment in Croatia for many years, but it was not properly regulated until 2014 with the enactment of the gambling law Zakon o igrama na sreću. To this day, this law sets the rules for legal online and offline gambling operations in Croatia. Regarding online gambling, the sector is also regulated by the Code of Rules for the Organization of Remote Games. Under the Zakon o igrama na sreću, a game of chance is defined as any game that gives participants the opportunity to win cash, goods, or services, with the outcome depending on an uncertain event.
The law stipulates that games of chance may be offered only by operators who comply with the gambling law and have been authorized by the Government of Croatia and the Ministry of Finance. It also states that all rights to operate games of chance in the country are transferred to Hrvatska Lutrija, a state-owned company. According to the law, the legal age in Croatia for participation in gambling activities is 18 years.
Casinos in Croatia
Other Forms of Legal Gambling in Croatia
Online GamblingGambling Regulator in Croatia
The current legislation regulating gambling in Croatia came into effect after the European Commission approved the Zakon o igrama na sreću. Under that law, licensing responsibility falls to the Ministry of Finance. As mentioned earlier, applications for online gambling licenses are accepted only from operators that already run land-based gaming facilities in Croatia.
Licenses issued for gambling purposes are valid for 15 years and there are five types of licenses that the regulator can grant. These include:
- Number lotteries – games like joker, bingo, keno, and classic lotteries in which wins depend on the number of correctly guessed numbers or symbols
- Instant, electronic lotteries – lotteries with a predetermined result; participants learn whether they win or lose only after they join the draw
- Slot machines
- Sports betting, including casual betting
- Traditional casino games
Online gaming and betting operators are required to utilize a Random Number Generator (RNG) to ensure that the outcomes of all games are free of bias. The RNG must also be approved by the regulator.
In its role as a gambling regulator, the Ministry of Finance of Croatia is tasked with several duties. The first is to issue licenses to applicants that meet the requirements for the respective operations. The regulator must also set guidelines that licensees must follow while operating under the license issued by the Ministry of Finance. The regulatory body must oversee the work of licensed operators, support international cooperation, and regulate the gambling market in Croatia according to the Zakon o igrama na sreću of 2014.
There is also a player-return percentage requirement that license holders must meet. When conducting lotteries, operators must ensure that prizes equal or exceed 50% of the total sale price of all lottery tickets. Meanwhile, winnings granted by slot machines must amount to at least 80% of the fee for participation in the games.
Gambling License Application Process in Croatia
Operators that wish to apply for an online gambling license in Croatia must participate in a tender. To qualify, applicants must have a share capital of at least HRK 4 million as well as an HRK 3 million bank guarantee to ensure that winnings can be paid out. Foreign operators may also participate in the tender, but they must operate a land-based gambling facility in Croatia.
The application form must include the following:
- The name of the company, its headquarters address, and the company’s personal identification number (OIB)
- A document proving payment of a license fee of HRK 3 million
- Data concerning hardware, software, network, system, and software support
- Proof, provided by an independent international body, that the results of testing software and systems used to determine outcomes, as well as the games provided by the operator, comply with imposed regulations
- Rules that apply to every type of provided activity
- Details about a bank account set up at a banking institution registered in Croatia
- Data about the physical location of servers, which must be within the territory of Croatia
- Description of personal data protection tools and measures to be utilized (must comply with requirements imposed by the regulator)
- The address of the website or websites
- A copy of the contract signed with the Croatia-registered provider
- Data on the location of the land-based gambling facility owned by the operator, with a description of the number of people it employs
Among the documents that license applicants must also provide are:
- Copies of the constituent act
- Information on the organization’s activities, as well as extracts from the court register
- Proof that the company complies with the tax laws in Croatia
- A business plan covering operations for the upcoming three years
After applicants submit the aforementioned documents, the Ministry of Finance informs all participants about the tender within 30 days. Applicants approved by the regulator will have 60 days to sign the agreement that authorizes them to offer gambling services in Croatia.
Gambling Taxes in Croatia
In addition to the license fee of HRK 3 million, gambling operators in Croatia are also required to pay a gambling tax. The tax rate levied on gambling companies depends on the type of activity offered by the operator.
Lottery providers must pay a tax of 5% on revenue generated from lottery ticket sales. Sportsbook companies also pay a tax of 5%, which applies to turnover from betting. Casino companies are required to pay a tax of 15%, imposed on their gross gambling revenue. There is also a 25% tax on slot operations, levied on gross revenue generated from slots.
Players from Croatia must also pay taxes on the winnings they earn through gambling activities. If the total amount of one’s winnings is up to HRK 10,000 (€1,300), the tax imposed is 10%. Players who win between HRK 10,000 and HRK 30,000 must pay a tax of 15%. If gambling winnings exceed HRK 30,000 (€4,000), players are required to pay a tax of 20%. Lastly, a 30% tax is levied on gambling winnings that exceed HRK 500,000 (€65,000).
The high gambling fees and taxes are some of the reasons why smaller local companies are less likely to join the gambling business in Croatia. Meanwhile, large international gaming and betting companies have subsidiaries operating in Croatia, further expanding their presence in the European market.
Closing Thoughts
Gambling has been regulated and legal in Croatia since well before the country gained its independence. After Croatia became an independent country in 1991, various forms of casino games were offered throughout the country. However, casinos began to be properly regulated in 2010 with the enactment of the Ordinance on Interactive Online Casino. Later, that law was amended to fit the evolving gambling environment in the country.
Currently, the gambling industry in Croatia is regulated by the Zakon o igrama na sreću of 2014, which came into effect at the beginning of 2015 after it was approved by the European Commission. Under that law, both land-based and online gambling activities are legal in Croatia as long as they are provided by licensed operators. One specific condition for online operations is that companies can apply for an online gambling license only if they already run a land-based gaming facility in the country.
While the legislative system in Croatia is fairly liberal regarding gambling regulations, the high fees and taxes have made it difficult for small local companies to compete with international gambling giants. As a result, the land-based and online gambling industry in Croatia is mainly run by popular international companies that have extensive experience in this field and can afford to pay higher fees and taxes.