Latvia, officially known as the Republic of Latvia, is a country located in Northern Europe and also a member state of the EU. Latvia is a Baltic country, with many of its laws following the same legislative system as neighboring European countries. Gambling in Latvia is also regulated in a similar manner as in other Northern European regions.
Latvia has legalized gambling since 1998, with the main piece of legislation regulating this industry being the Law on Gambling and Lotteries. As a former member state of the Soviet Union, Latvia did not embrace legal gambling up until it gained its independence. In the following years, the gambling industry in the European country started evolving into a regulated sector. Currently, the Lotteries and Gambling Supervisory Inspection is the regulator that oversees the gambling industry in Latvia.
Since Latvia is a part of the EU, the Union’s gambling directives also apply to the laws implemented by the Baltic country. Online gambling was also legalized in Latvia in 2006, with operators who wish to conduct online casino or betting activities having to obtain a license from the Lotteries and Gambling Supervisory Inspection.
While online gambling was banned for several months in 2020, in 2021, the ban was lifted. Currently, Latvians can legally place wagers on several licensed online gaming and betting sites. Latvian players should keep in mind that they must avoid playing on unregulated online websites as they can be penalized with an administrative fine.
History of Gambling in Latvia
Up until 1991, Latvia was a part of the USSR where most gambling activities were banned completely. When the country gained its sovereignty, gambling activities started becoming legal in Latvia, with the first gambling piece of legislation being introduced in 1998. That said, the first land-based casinos in Latvia were launched back in 1991. However, they were operating for several years without being regulated.
In 1998, the Law on Gambling and Lotteries was enacted, making it the main piece of legislation regulating the gambling industry in the European country. This law also introduced the Lotteries and Gambling Supervisory Inspection, which is the gambling regulator in Latvia, responsible for licensing operators and regulating the gambling industry in the country.
Under the aforementioned law, lotteries, casino games, and sports betting were legalized in Latvia However, the said piece of legislation had to go through some amendments so it can properly regulate the constantly evolving gambling industry. What is more, after Latvia joined the EU in 2004, it was required to be compliant with the gambling directives set up by the EU.
In 2006, through an amendment of the Law on Gambling Lotteries, online gambling was also legalized in the country. The new changes enabled operators to apply for online gambling licenses issued by the Lotteries and Gambling Supervisory Inspection.
After online gambling became a regulated and legal industry in Latvia, the country started taking measures to prevent unlicensed virtual gambling. As of April 2020, banking institutions and ISPs are required to notify the government about Latvians who attempt to initiate payments to or from unlicensed gambling websites. Individuals who are caught up depositing to or withdrawing from unregulated gaming or betting sites will be required to pay €350 for every transaction as an administrative fine. Provided players gain profit from gambling on unlicensed websites, they may face additional charges as this can be considered as a tax evasion crime.
Due to the global Covid-19 pandemic, Latvia completely banned online gambling between April 2020 and June 2020. The reason for the government making this decision was to stop Latvians from gambling away their money during the period of increasing unemployment due to the pandemic lockdowns. In 2021, online gambling was yet again allowed in Latvia as the ban was lifted.
Gambling Regulations in Latvia
After Latvia gained its independence in 1991, gambling activities in the country were mainly conducted without being properly regulated. In 1998, the Law on Gambling and Lotteries was implemented, legalizing gambling activities and setting up the rules for the regulation of the industry. This is still the main piece of legislation that governs the gambling industry in Latvia, with several amendments being introduced to the law throughout the years.
Under the Law on Gambling and Lotteries, operators who wish to conduct gambling activities on the territory of Latvia must obtain a license from the Lotteries and Gambling Supervisory Inspection. This regulatory body was also introduced with the enactment of the law in 1998 and it is responsible for the regulation of gambling operators in Latvia.
According to the Law on Gambling and Lotteries, gambling is defined as a game where a person might fully or partially win a prize, with the outcome dependent on either chance or previously unknown condition, provided that the person has placed a bet. Gaming machines that only offer free games as a prize or award prizes of different kinds, with a monetary value of no more than €15 are not considered gambling. Machines that offer cash prizes, however, fall under the definition of gambling.
The legal age to gamble in Latvia according to the law is at least 18 years of age. Despite that, many land-based casinos in the country have decided to welcome only players who are 21 or older. Online casinos, however, stick to the age limit set by the law and are available to players who are 18 or older.
Speaking of online gambling, this type of activity was legalized in 2006 through an amendment in the Law on Gambling and Lotteries. Under the law, operators are required to obtain a license from the Lotteries and Gambling Supervisory Inspection if they wish to run online casinos in Latvia.
Unlicensed gaming and betting websites are blocked by ISPs in Latvia. What is more, in 2014, the country introduced the blacklist model, including unlicensed operators in this list and permanently blocking their access to the gambling market in Latvia.
Those who are providing gambling services without being compliant with the regulations imposed by the law are subjected to a fine of €200. Those who are breaching the law related to the provision of one-time lotteries or public lotteries may face a penalty between €200 and €500. There are also other types of fines that may be imposed on operators or individuals who breach the Law on Gambling and Lotteries, with all of them being listed in the latest amendment of the law.
To prevent illegal online gambling, in 2020 Latvia imposed new regulations, requiring financial institutions and ISPs to notify the government about attempts for initiating payments to or from unlicensed gaming and betting websites. Individuals who are found to make gambling-related transactions at unregulated websites will need to pay a financial penalty of €350 for every transaction.
Online 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. While there are not many licensed online casinos yet, Latvians should be careful with unlicensed gambling operators. The country is using ISPs to block unlicensed gaming sites and include them in Latvia’s blacklist. However, players who are found to gamble on unregulated online casinos will face a financial penalty.
Initially, online casinos were not as strictly regulated, with no serious consequences being imposed for either unlicensed operators or Latvians who play 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 attempts to limit access to unlicensed gaming sites, many players from Latvia resorted to the use of VPNs to circumvent the restrictions. However, as of April 2020, Latvian financial institutions are 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. This means that if there are multiple instances of the same player making payments to or from such websites, he/she will have to pay a very hefty fine.
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 Legal Department of the said authority. In addition to issuing licenses to online gambling operators, the regulatory body is concerned with other aspects such as setting up a specific minimum for the RTP of 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. This is the regulatory body that is responsible for licensing 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 have registered their companies in Latvia and have paid-up share capital of at least €1,400,000. The shares of foreign shareholders of the company’s share capital must not go beyond 49%. This condition, however, does not apply to investors who are residents of any of the member states of the EU, countries of the EEA, 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 of the current year, showing the economic activity during the said period, provided the company has participated in any commercial activities
- Data on the credit liabilities of the applicant company, giving information on the amount of the liabilities and the terms for the loan repayment relevant on the day of the application submission
- Information about the source of funds and property that have been invested in the company’s share capital
- Business plan for the development of the company for the upcoming year, listing the types of gambling that will be provided, the expected income and cost for the operation as well as the way the generated profit will be used
- A statement proving that the company’s supervisory board and management board members, as well as the auditor, will 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 the cumulative amount of their winnings for the year exceeds €3,000, however, it will be added to their taxable income.
While in most cases players are not required to pay taxes on their gambling-related winnings, gambling operators must pay gambling taxes, with rates depending on the type of gambling they conduct. The gambling taxes in Latvia are determined by the Law on Lottery and Gambling Tax, which has been 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% levied on the revenue generated through the organization of this type of game. Sweepstakes and betting also incur a tax of 15% on the revenue accumulated from the organization of the game.
Bingo games, lotteries, and instant lotteries require operators to pay a gambling tax of 10%. The tax base for bingo games is the revenue that has been generated from conducting the games. Meanwhile, the tax base for the lottery types of games is the profit from ticket sales. The tax rate for operators conducting online gambling is also 10%, with the tax base being the revenue that has been generated through the organization of the games.
About 75% of the gambling taxes in Latvia go to the state budget, while the remaining 25% are paid to the government of the territories where the gambling activities are conducted. When compared to other European countries, Latvia has rather reasonable gambling tax rates that can even be considered average when compared to international rates.
Gambling activities started becoming popular in Latvia after the country gained its independence in 1991. In the next few 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, throughout the years, it has been amended several times 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 being responsible for authorizing operators to conduct online casino or sports betting activities in Latvia. In the last few years, the Latvian government is taking serious measures to restrict unlicensed online gambling, with heavy fines for players who are found to gamble on unregulated sites.