Latvia’s Gambling industry Experienced a Drop In Revenues

  • 2021-09-27

It’s no secret that the majority of Europe enjoys gambling and when it comes to the northeastern region of this continent, Latvia has a thriving multi-million Euro gambling industry. This is despite the strict gambling regulations implemented in the country. Today, Latvia has 10 retail casinos and 13 registered or licensed online casinos.

This makes Latvia a great spot in northeastern Europe to go to if you are fond of visiting casino hotspots. Sports punters would also not have a hard time placing their bets here, online or not. Whether you’re looking for the best online casinos or the best odds on any of the sports you follow, you should be able to easily place your bets from here.

However, like how things are in other countries, Latvia’s gambling industry has also experienced a decrease in revenue because of the COVID 19 pandemic. This year, it has been reported that during the first six months, the local gambling sector witnessed a 26 percent decrease in revenue.

How Big is the Decrease?

According to Latvia’s Ministry of Finance, the total revenue of the gambling sector in the first half of the year was only €7 million. This is around €16 million lower than the forecasted revenue that the ministry had for the said period.

The chief executive of the Lotteries and Gambling Monitoring Inspectorate, Signe Birne, explained how significant the impact is of the pandemic when it comes to how the industry is doing. Birne said, “If we look at the six-month results, then, in fact, the traditional gambling sites have worked for 16 days in total. This has an impact on overall results. Of course, interactive gambling has not stopped.

“Unlike last year, when interactive gambling wasn’t offered for about two months, they have worked nonstop this year. It also appears in the results that total revenue, which is in six months, is from the interactive gambling.”

The spokesman for the Latvian Games Business Association, Arnis Vērzemnieks, also spoke about how there just weren’t enough customers for the retail sector of the industry. Vērzemnieks said, “The reason is that there simply aren’t enough customers. This trend, with a significant reduction in customers, started already, I would say, before the pandemic, when the Register of Self-enied Persons was introduced, when the number of customers fell quite rapidly by 20-25%.

“Then, of course, there was a pandemic, and it should be noted that, from the middle of this year, this register includes those who have alimony debt, which is about 40 thousand people, and it also leaves a great impact.”

Now, even if the overall gambling revenue of the country dropped, there was still a significant increase in online gambling. Jānis Trēgers, a member of the Latvian Interactive Gambling Society and Chairman of the board of “11. lv” said that the online sector grew at least 5 percent during the first six months of 2021.

Trēgers said, “[This] trend is still growing, but it's in similar sizes as it has historically been in recent years. If we compare [how the industry is doing] to the last quarter before the pandemic, the total gambling volume in Latvia has fallen by two-thirds. This is very important. Namely, it can't be said that everyone who previously played is now gambling on the Internet.

“This fall is extremely significant. Even if some customers have migrated from the hall to the Internet, it has in no way compensated the extent seen before the pandemic,” he added.

A representative of the State Revenue Service or the VID also explained that before the pandemic, the tax revenues collected from gambling companies were steadily growing. According to the representative named Natālija Fiļipoviča, the turnover before the pandemic increased by around 9 to 10 percent on an annual basis. However, this started to go down in 2020, when the pandemic started.

Fiļipoviča said, "If we compare the revenues provided during the first half of the year, then in 2019 they amounted to €20 million for this tax. €15 million in 2020, but only €7.03 million in 2021. These tax revenues have decreased by two-thirds.”

Illegal Gambling Activities

It could also be considered that Latvia’s regulated gambling industry is still up against the underground market. In the whole of Europe, the illegal gambling market is about 20 percent of the gambling scene. In Latvia, however, it’s reported that 45 percent of the gambling transactions are made underground.

While the pandemic has triggered the growth of the online gambling sector in the country, it still somehow contributed to the growth of illegal gambling as well. With that, the Lotteries and Gambling Monitoring Inspectorate had to work harder to lessen the accessibility of illegal gambling sites.

Birne said, “Overall, in 2021, we've already made 594 decisions [to block domains]. Of course, these blocked domains use a variety of technological capabilities to move to another location. We're trying to follow it again with our automated devices and tools.”