Lithuania, officially known as the Republic of Lithuania, is a Baltic country located in Northern Europe. When it comes to gambling, we can conclude that it has been an illegal activity for numerous years until it was legalized in 1992. Currently, both land-based and online gambling is legal in Lithuania, with the main piece of legislation that regulates the industry being the 2001 Gaming Law.
For a long time, the gambling industry in Lithuania was extremely limited, with online gambling licenses being issued only to operators who were already running brick-and-mortar casinos in the country. Thankfully, following the legislative changes in 2021, operators are now allowed to apply for online casino licenses even if they do not own land-based casinos.
As a member state of the EU, Lithuania is required to comply with the gambling directives of the EU. With the implementation of the latest amendments in 2021, the Lithuanian gambling legislative system is fully compliant with the requirements imposed by the EU. One of the reasons for the new gambling regulations is for Lithuania to attract more foreign investments as the number of online casinos currently operating in the country is rather low.
History of Gambling in Lithuania
Until 1992, Lithuania was a part of the USSR, where most forms of gambling were deemed illegal. After the country gained its independence, the legalization of gambling activities began in 1992. The lottery was the first form of gambling that was legalized in Lithuania before any other gambling activity was regulated in the country.
Land-based casinos started being regulated in 2001 with the enactment of the Gaming Law. While it has gone through several amendments throughout the years, this is still the piece of legislation that regulates gambling in Lithuania. Under this law, operators who wish to run land-based casinos or gambling halls are required to obtain a license from the Gaming Control Authority.
Once brick-and-mortar casinos were legalized in Lithuania, numerous casino facilities were launched, with about 20 land-based casinos operating in the country at one point. Unfortunately, the global recession of 2008 forced quite a few casinos to shut down and the coronavirus pandemic further decreased the number of operating land-based casinos in Lithuania.
In 2003, online lotteries were legalized through the Law on Lotteries, making lottery games the only form of online gambling that was legal in the country for quite a few years. In 2016, other forms of online gambling were legalized through an amendment of the Gaming Act of 2001. Even though this law was supposed to liberalize online gambling in the country, for the longest time, only companies that were already operating land-based casinos in Lithuania were allowed to apply for online casino licenses.
Having such a restrictive online gambling model, Lithuania was repeatedly criticized by the EU as the country was not compliant with the gambling directives of the EU. Feeling pressured, in 2021, the European country finally amended its Gaming Law, allowing operators to apply for online-only gambling licenses. This made the gambling industry in Lithuania a lot more inclusive and compliant with Article 56 TFEU3 and Article 8 of Directive 98/34/EC.
Gambling Regulations in Lithuania
Gambling activities in Lithuania have been legalized ever since the country gained its independence in 1992. Throughout the years, the main law regulating gambling in Lithuania has been reviewed and amended several times to fit the constantly changing industry. That being said, the gambling sector in Lithuania is still being governed by the Gaming Law that was enacted in 2001.
Under that act the legal gambling age in Lithuania is 18 years, however, this applies only for non-casino games. In case of entering a land-based or online casino, Lithuanians are required to be at least 21 years of age.
Under the Gaming Law, operators who wish to offer gambling activities on the territory of Lithuania have to obtain a license from the Gaming Control Authority. This regulatory body was established with the enactment of the Gaming Law in 2001 and is a division of the Ministry of Finance in Lithuania.
In 2016, the Gaming Law was amended, introducing online gambling in the country. This version of the main piece of legislation allowed operators who were already running land-based casinos in Lithuania to apply for an online casino license. Unfortunately, for quite a few years, other operators had no chance to obtain a virtual gaming license unless they were already operating a land-based gaming facility in Lithuania.
Thankfully, in 2021, the Gaming Law was amended yet again, making sure that the gambling industry in Lithuania gives different operators the same opportunities. Thanks to the latest changes in the law, operators can now apply for online-only licenses. This opened up the market for more operators as they were no longer required to run a brick-and-mortar casino to obtain an online casino license.
Online Gambling in Lithuania
Online gambling is also legal in Lithuania, with the amendment in the Gaming Law of 2016 allowing operators to apply for online gambling licenses. To be able to provide online casino or online sports betting activities, operators must be licensed by the Gaming Control Authority. Before online casino games and sports betting became legalized in 2016, the only legal form of online gambling that was allowed in Lithuania was the lottery. As it has been monopolized by the state-owned Olifeja, this was the only operator that was allowed to offer the purchase of lottery tickets online.
The main reason for Lithuania legalizing online gambling was the overwhelming amount of illegal gambling on foreign unlicensed websites. Prior to the introduction of legal virtual gambling in the country, it was established that Lithuania was losing about €6 million per year due to taxes not being collected from unlicensed online gambling. Ever since online gambling became a legal and regulated sector in Lithuania, the country is using ISPs to block access to unlicensed gaming and betting websites.
It should be noted that even though online gambling was legalized with the amendment in the Gaming Law in 2016, this sector was very restricted up until the recent changes in the legislative framework. Prior to the changes in 2021, only operators that were already licensed to operate a land-based casino in Lithuania could apply for an online gambling license. This restricted the number of licenses that could be issued, giving Lithuanian players a limited number of online casinos where they could legally play.
As the restrictive licensing policy for online gambling in Lithuania was not compliant with the gambling directives of the EU, the country has been pressured several times to review its Gaming Law. In 2021, Lithuania adopted an amended version of the Gaming Law, changing the requirements for obtaining an online gaming license. Thanks to the latest revision of the law, operators can now apply for an online-only gambling license from the Gaming Control Authority.
As private companies are now allowed to obtain a virtual gambling license without having to run a land-based casino as well, the Lithuanian government is hoping to attract more investments as currently very few companies have joined the online gambling sector of Lithuania.
Gambling Regulator and Licenses in Lithuania
Under the Gaming Law of 2001, the regulatory body responsible for governing the gambling industry and issuing gambling licenses in Lithuania is the Gaming Control Authority. It is a division of the Ministry of Finance and it is responsible for the supervision of the gambling sector in Lithuania.
There are five types of licenses that the Gaming Control Board can issue:
- Casinos offering table games and category machines
- Machine halls offering category B machines
- Sports betting
It is possible for one operator to obtain all five types of licenses. Those who wish to conduct remote gambling will need to acquire one of the aforementioned licenses and also receive permission from the Gaming Control Authority.
There are two types of lottery licenses that can be issued to operators who wish to conduct lottery games in Lithuania. The first one is a national lottery license, while the second one is a local lottery license. The Gaming Control Authority is the body that issues the license for the national lottery. As for a license for a local lottery, the permit is issued by the executive body of the respective Municipality where the lottery will be conducted.
Companies that want to apply for a lottery or gambling license must provide the following documents:
- An application containing information about the company such as its name, physical address, email address, code, phone number, name and surname of the company’s director, his/her occupation, or the one of the person who has been authorized to fill out the application, his/her signature, list of documents attached to the application
- Documents confirming the formation of the company’s capital as well as its payment and disposal
- Data about the members of the supervisory board, directors board, and executive officer of the company, his/her deputy, the name, surname, and identification number of the company’s chief financial officer, the participation of these people in other companies
- Documents providing information on the funds of company founders and shareholders that were used to obtain shares of the company
Gambling Taxes in Lithuania
Lotteries and gambling activities in Lithuania are taxed, with the respective rates being determined by the Lottery and Gambling Tax Law. The taxes are levied on operators who have been authorized to legally conduct lottery games and gambling activities.
A tax of 5% is levied on the prize of lottery tickets that are being sold during a lottery. Receipts collected from bingo games, totalizators and bets are levied with an 18% tax. A tax rate of 13% is applied to lottery games and gambling conducted through remote gambling means. The tax base for the online gambling tax is the generated revenue minus the winnings that have been paid out by the operator.
Under the Lottery and Gambling Tax Law, table games and machines are also taxed on a monthly basis. The tax imposed on category A machines is €260 per month, while the tax amount on category B machines is €130 per month. The monthly tax levied on roulette, dice, or card table games is €2,300.
The gambling industry in Lithuania has come a long way since it was legalized in 1992. Following the independence of the country, various forms of gambling started being regulated, with most of them still being governed by the Gaming Law that was enacted in 2001.
While the piece of legislation of 2001 has set up the legislative framework to conduct most forms of gambling in Lithuania, the law had to go through several amendments to fit the evolving gambling sector. In 2016, Lithuania put a start on the legalization of online gambling, allowing operators to apply for online casino and sports betting licenses.
According to the law, the Gaming Control Authority is the body responsible for licensing lottery and gambling services in Lithuania. This is also the authority that issues licenses for remote gambling on the territory of the country. However, up until recently, only operators who were already running a land-based gambling facility were allowed to apply for an online license.
In 2021, Lithuania amended its Gaming Law yet again to ensure a more inclusive online gambling environment. The latest changes in this piece of legislation allowed operators to apply for online-only licenses, with the Lithuanian government hoping that this would attract more investors and expand the gambling market in the country.