Author: Ivan MostovoyUpdated
Timely transformations and clear regulation have made the region a prospective investment direction.
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:
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.
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.
Let us consider the key points of the legal act:
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:
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:
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:
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 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:
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.
Let us consider why business owners choose the jurisdiction:
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:
The Eastern European gambling market is a prospective investment direction.
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