The Baltic region is home to three sovereign republics, Latvia, Estonia, and Lithuania, all of which lie on the east coast of the Baltic sea. All three states boast membership in the European Union (EU) and are part of the European Economic Area (EEA).
They are known for their liberal outlook and flat tax rates. The countries successfully transitioned to market-driven economies once they regained their independence after the collapse of the Soviet Union.
Their progressive approach extends to gambling. All three Baltic states have introduced adequate regulatory frameworks that aim to protect residents from the dangers associated with playing at unregulated offshore websites.
Gambling operators looking to penetrate the Baltic market can apply for licenses from the authorities of these countries. If approved, the permits will allow them to legally service Baltic customers, who, in turn, will be graced with the protection of their local gambling regulators. Let’s examine closely how the three Baltic states regulate their iGaming markets.
iGaming Regulations in Latvia
Latvia’s gambling industry has witnessed a steady growth in the past decade. The sector generated overall revenues of more than €210 million in 2015 alone, most of which came from video slots. The country’s gaming industry employs over 3,800 workers and attracts more than half a million individual visitors each year.
This is quite an accomplishment, considering Latvia has only five landbased casinos. One great thing about being a gambler in Latvia is that online gambling is legal and properly regulated in the country. This applies to many different forms of iGaming, including online casinos, sports bettings, and poker.
The online segment is gradually starting to dominate the local industry. Its revenue increased by a whopping 98% back in 2015. The country has 14 or so regulated gambling operators for the time being, including major players on the European market like Mr Green, Betsafe, and Paf.
The online sector falls under the regulatory scope of the Lotteries and Gambling Supervisory Inspection. The primary piece of legislation that governs such activities is the Latvian Gaming and Lotteries Law. Operators must obtain permits from the local regulator before they can legally offer their services in the country.
One of the licensing conditions requires them to have a share capital of at least €1.4 million. They also have to be registered in Latvia and the capital of any foreign shareholders in a given company should not exceed 49%. Online operators are taxed at a rate of 10% of their revenue.
iGaming Regulations in Estonia
Estonia is a small country with a population of 1.3 million. As a recent survey revealed, Estonians are keen on gambling, with around 80% of adult residents admitting to having wagered on chance games at least once.
By means of comparison, the gambling participation rates in Sweden amounted to 66% according to a survey conducted by Spelinspektionen, the Swedish gaming regulator. Estonia legalized iGaming activities over ten years ago in an attempt to bring in additional profits for the local economy after the financial crisis of 2008.
The remote betting sector is governed by the provisions of the 2008 Gambling Act. The legal forms of gambling Estonians have access to include casino games of chance, bingo, poker, sports betting, horse race wagering, and lotteries. All of these are regulated by the Estonian Tax and Customs Board, or Maksu- ja Tolliamet.
The latter is part of the local Ministry of Finance and falls under the jurisdiction of the Estonian government. The gambling laws and regulations in Estonia prohibit licensed operators from offering chance and skill-based games to Estonian nationals under 21 years of age. As for remote lotteries and toto, the legal ages are 16 and 18 years old, respectively.
License applicants looking to offer chance-based games must provide proof of minimum share capital of €1 million. They must acquire two types of licenses - an operating and an activity permit. Operating licenses for online gambling have a validity of up to 5 years.
Licensees who offer games of chance or skill are taxed at a 5% rate of their gross gaming revenue (the overall handle minus the winnings paid out to players). At the moment of writing, Estonia has 23 remote gambling operators. Some of these include prominent names like PokerStars, bet365, Betsafe, Unibet, Paf, and Tonybet.
iGaming Regulations in Lithuania
The Republic of Lithuania has nearly twice the population of Estonia, with 2.7 million citizens as of 2020. The country has around 18 terrestrial casinos. The online sector quickly overtook the landbased gambling industry after the legislative amendments of 2016.
The amendments paved the way for regulated remote gambling, reducing the outflow of funds from the country. Estimates suggest that the local authorities have been losing an average of €6 million annually to offshore gambling operators.
The latest Lithuania gambling trends show the local regulator is unrelentless toward unauthorized operators. The new law introduces several measures to combat illegal operations, such as blocking payments to unauthorized gambling sites. The legislation also benefited players since it helped create a safer remote gambling environment for them. Private betting firms looking to offer their services to the citizens must obtain licenses from the local regulator, the Lithuanian Gaming Control Authority. It regulates the sector as part of the Ministry of Finance.
The tax rates in Lithuania are quite tolerable at 13% of the operators’ gross gaming revenue. The country has adopted a harsh stance on unauthorized firms that service citizens without authorization from the local regulator. The Gaming Control Authority maintains a blacklist of such operators. It is available on the regulator’s website alongside a list of the approved companies.