Gambling in Eastern Europe: an Important Part of the Economy

Ivan Mostovoy

Author: Ivan Mostovoy

25 september 2023

Timely transformations and clear regulation have made the region a prospective investment direction.

Specialists of the Win Win Casino company are going to tell you about the present and future of the gambling industry and countries where it is worth launching iGaming startups.


Features of the Casino Sector

Gambling industry in Eastern Europe

The niche in Eastern Europe is growing unevenly.

Some jurisdictions (for example, Estonia or Latvia) took the path of legalisation back in the early 2000s. Today, the lion's share of their GDP is accounted for by gambling and sportsbook sectors, which attract foreign investments and create high-paying jobs.

The governments of other states (for example, Kazakhstan) have not yet formed a unified strategy. The industry here is not stable yet, but the authorities promise large-scale reforms in the near future.

Features of the industry’s development:

  1. Low competition. In most countries, casinos and bookmaker’s offices opened their doors in the 2000s, and the iGaming sector started working even later — after 2010. For this reason, the market is not yet overcrowded, and companies have room to grow.
  2. Well-established IT sector. Many modern data centres and IT hubs are being built in Eastern Europe, and the entire region is covered with a high-speed 4G and 5G network.
  3. Strong labour market. Programmers from Ukraine, Georgia, and the Baltic countries have established themselves as professionals. On these territories, top brands open branch offices and hire local developers, web designers, and architects.
  4. The popularity of casino games among the public. Locals like to place bets on sports events and play different slots. They consider gambling a way to have fun and enjoy leisure time.
  5. Heterogeneous situation. While in some countries (for example, Georgia), the sector is thriving, in others (Kazakhstan), it is only gaining momentum. The market is very fragmented, and one of the reasons for it is a different approach to regulation.

Over the past 5 years, many top bookmakers and manufacturers of gaming products have opened representative offices in Eastern Europe. Entrepreneurs are attracted by the well-established IT infrastructure, average taxes by EU standards, and a strong labour market with a salary level that is not yet as high as in Western countries.

  • Amusnet Interactive opened a branch in Georgia in 2022. It is engaged in GameDev development (production of slots and entertainment with jackpots).
  • The Evolution Gaming Live content provider owns several modern studios in Estonia and Lithuania. The vendor also has a representative office in Tbilisi, Georgia.
  • Relax Gaming and Playtech companies have opened branches in Tallinn, Estonia.


For more than 30 years, local gambling has survived many events.

In the 90s, a huge number of land-based casinos and clubs with slot machines were opened in the country. All of them were closed in 2009 following the instructions of then Prime Minister Yulia Tymoshenko. After that, for more than 10 years, entertainment for money was officially banned, but in fact, it operated in a grey zone.

In 2020, the government legalised gaming solutions. The main reason was the growing shadow business, as well as the desire of the authorities to increase revenues to the budget.

Basic Content of the Law No. 768-IX

Let us consider the key points of the legal act:

  1. All types of gambling are allowed in Ukraine. These are casinos, bookmakers’ offices, and lotteries. Sports poker is not considered a game of chance, so there is no need to obtain a licence to hold tournaments.
  2. Each type of activity requires a separate permit. It is issued by the special state body, CRGL. The government has provided a minimum period for considering an application — 15 calendar days. The certificate is valid for 5 years.
  3. The cost of a licence depends on the chosen niche. The decision to open a land-based casino or a betting shop will be more costly. The price of the document is calculated based on the minimum wage as of January 1 of the reporting year.
  4. Operators are required to adhere to responsible gambling principles. This includes two-factor identification of users, a ban on the acceptance of bids from persons under 21 years old, and the creation of self-restriction and self-exclusion registries. The government plans to implement an online monitoring system and connect all licensees to it.

Flexible Approach to Taxation

After the adoption of law No. 768-IX, many entrepreneurs were unsatisfied with too high fiscal rates. Therefore, the Verkhovna Rada revised the taxation rules. Soon after that, the draft bill 2713-d was presented.

Highlights of the document:

  • The GGR (Gross Gaming Revenue) rate for all operators is set at 10%.
  • Taxes on winnings (18% on the prize money and 1.5% military tax) are provided only for those players whose reward exceeds 10 minimum wages.
  • The profit tax for the casino industry is 18%.

After February 24, 2022, the Ukrainian authorities decided to help businessmen even more. The government allowed all licensees to switch to a simplified taxation system. About 80% of operators took advantage of it.

Despite the war, the industry continued to contribute to the victory. The niche is positively affected by the legalisation of cryptocurrency and the simplification of communication with the state via the Diia application.


The local gambling market is actively growing and developing thanks to its close connection with tourism. These 2 sectors bring in the lion's share of the country's GDP, and therefore, they are supported by regulators in every possible way.

The work of offline casinos is also tied to the tourism division. Most of them are located in popular hotels and operate in the coastal zone. These are the famous Black Sea resorts of Batumi, Kobuleti, and others.

To launch iGaming platforms, entrepreneurs need to first obtain permission to open a land-based establishment. Alternatively, it is possible to conclude a partnership agreement with a legalised operator and work under a sublicense.

It is profitable to work in Georgia for several reasons:

  • Simple certification procedure. Operators can send copies of documents using the tax service website and submit an application online. It is reviewed for free within 15 days, and after its approval, business owners will need to pay a state fee.
  • Flexible tariffs. The fiscal burden depends on the entrepreneur’s income for the reporting period. The more they earn, the higher they have to deduct in the end.
  • Well-developed community. Many manufacturers of games and betting software have opened their representative offices in the country. The capital has hosted the prestigious SBC Summit Tbilisi event for several years in a row. It brings together hundreds of executives, managers, politicians, and respected market experts.
  • Good prospects for growth. Georgia is one of the gambling centres in Eastern Europe. The country skillfully uses the ambiguous attitude towards such entertainment in neighbouring jurisdictions (for example, Turkey, Azerbaijan, and Kazakhstan), attracting as many players and investors as possible.


Gambling legalisation: Baltic laws

This region is a perfect example of sensible casino policies.

The local government legalised games for money in the early 2000s and immediately proposed clear and understandable operating rules for all market participants.

Membership in the European Union since 2004 has given an additional impetus to the development of the niche. The laws were adopted in accordance with EU standards, and huge investments from the West were not long in coming.


The country was one of the first to regulate the work of online casinos by signing the Gambling Act in 2008. The activities of bookmakers, online sweepstakes, and poker rooms are also allowed here.

The lottery draws are managed by the state monopolist, Eesti Loto.

Why it is worth opening an online casino in Estonia:

  1. Stable legislation. The European regulatory framework was taken as a basis. Bets can be accepted only by licensed operators who adhere to responsible gambling principles and pay taxes on time.
  2. Unlimited number of permits. For each type of service, entrepreneurs need to obtain a separate licence. The document is valid for 5 years. The amount of the state duty depends on the type of activity: for online casinos, it is €47,940.
  3. Loyal taxation. Project owners pay only 5% of GGR, as well as taxes on profits and withdrawn prizes.
  4. Stable growth. The local market has huge potential. It suffered almost no damage during the pandemic. The main reason is that all types of gambling are allowed in the country, and the investors’ funds are distributed evenly.


The Lotteries and Gambling Supervisory Inspection of Latvia (IAUI) is responsible for the authorisation and issuance of relevant certificates.

Entrepreneurs can obtain a licence for all types of gambling, except lotteries. They are under the control of the local monopolist — Latvijas Loto.

Non-residents of the country can also launch an iGaming startup. The main thing is that the share of foreign investment in the company’s authorised capital does not exceed 49%. The minimum sum is €1,400 thousand.

Owners of online casino and sportsbook platforms pay only 10% of GGR, which is another advantage of working in Latvia.

The cost of the acquisition of a permit to implement an iGaming project is €200 thousand. Entrepreneurs can obtain a comprehensive certificate for the simultaneous management of online and offline casinos. The price of such a document is €427 thousand.

The government plans to tighten gambling legislation. Thus, in 2021, the authorities banned the acceptance of bets from citizens who have alimony debts. Any advertising of entertainment for money (even in the evening or at night) is also prohibited.


According to the Gaming Control Authority, at the end of 2022, the jurisdiction received €195.8 million in GGR. The indicator grew by 43.8% compared to the previous year.

Such rapid growth of the sector is explained by the correct policy of the authorities. They support legal operators and actively fight against unofficial businesses.

Key features in industry regulation:

  • The presence of separate permits for online and offline casinos.
  • Amendments to the Code of Administrative Offences regarding the confiscation of income received because of the organisation of unlicensed gambling.
  • Addition of mandatory transaction scanning requirements in accordance with AML and FATF policies.

The minimum authorised capital for starting a casino is €1 million. Legal operators must also have a financial guarantee in the amount of €72.4 thousand. These funds are kept in a special bank account.

GGR tax is 13%. The rate is the same for all market participants — bookmakers and casino or poker room owners.


Land-based gambling was legalised in 2009 after the signing of Law No. 157-IV.

The document allowed the operation of 2 zones:

  • North” (Akmola region and Schuchinsky district);
  • South” (Almaty region and the coast of the Kapchagay reservoir).

There are 13 licensed companies working in these territories. They accept bets on cards, roulette, and slots. Sports betting solutions are also allowed in these zones.

Casinos were opened in respectable hotels. In addition to gambling halls, there are lounge areas, bars, shopping and entertainment complexes. Such establishments attract residents of neighbouring countries (for example, Uzbekistan) where this type of product is prohibited.

As for the iGaming sector, it is in a grey area. The operation of digital platforms is considered illegal, but the authorities are not fighting offshore websites. Their servers are located abroad, which allows them to accept bets from Kazakhs without any problems.

The changes announced in 2023 apply to the offline niche. The regulators are planning to open another entertainment zone in Kenderli. The resort is just an hour's drive from Tehran, and the local government has already signed an agreement to attract investments from Iran.

In the spring of 2023, the forum called “Regulation of the Gambling Business: International Experience and Kazakhstan” was held in Astana.

The invited experts talked about the legalisation of the online sector. Representatives of relevant ministries promised to develop a plan for launching it. Entrepreneurs hope that Kazakhstan will follow the path of European countries and completely permit all digital and offline gambling activities.


Armenia is politically and economically connected to both the EU and the CIS region, which gives it a competitive advantage in many areas.

Casino games were legalised in the early 2010s. The government adopted the experience of its European colleagues and decided not to stop the development of virtual betting and offline locations. Thanks to this, there are no grey zones in the country: operators work openly and honestly and pay taxes on time.

Advantages of Launching an iGaming Startup

Let us consider why business owners choose the jurisdiction:

  1. Rapid growth of the sector. In 2022, GGR increased from €0.9 billion to €14.7 billion. At the beginning of 2023, the number of registered and verified accounts reached 8.7 million.
  2. Average level of competition. Although the local gambling sector has been working for more than 10 years, many European and Asian providers are taking a closer look at it. Entrepreneurs have an excellent chance to quickly enter the market and develop a solid customer base.
  3. The popularity of betting among the residents. Armenia is a gambling nation. Risk-taking is in the locals’ blood. They enjoy spinning reels in online slots, participating in lottery draws, and guessing the results of sports matches.

Emphasis on Safe Play

In recent years, the authorities have set a course for tightening legislation. Official brands can continue working in the niche, but they must adhere to responsible wagering principles.

Major changes in the niche:

  • Two-factor verification of users via BankID. Special attention is paid to minors, low-income citizens, and law enforcement officers. According to the deputy, Gevorg Papoyan, these categories of players are more exposed to the risks of ludomania than others.
  • Prohibition on the use of cash and electronic money. The account can be replenished only using bank cards.

The Main Things about the Casino Sector in the Region

Casino games development in Eastern Europe

The Eastern European gambling market is a prospective investment direction.

  • The advantages of the niche are low competition in the industry and well-developed IT infrastructure. It is also characterised by a strong labour market, which is why many Western providers open their offices here.
  • The Baltic countries are leaders in terms of GGR volume and the amount of raised capital. Lithuania, Latvia, and Estonia allow all types of casino products and have low tax rates.
  • Georgia is the entertainment centre of the entire Black Sea coast. The government is focused on the land-based sector as it is developed together with tourism. The state has a simple licensing procedure and a strong community.
  • Ukraine and Armenia are considered promising countries in terms of the growth of the sector. They have implemented clear legislation and strict, responsible gambling principles.

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