Author: Ivan Mostovoy16 october 2019
How to create a gambling project in Europe is a question that is asked by most of the ambitious entrepreneurs. In practice, all of them will have to pass several difficult stages before getting the first dividends from their business.
Gambling in the Old World has always been attractive to investors from all over the world. Both the online segment and land-based gambling establishments flourish here. The high popularity of the market among entrepreneurs can be explained by several reasons.
Almost all gambling projects pay off in the first three years after the launch. In the investment business, it is considered to be a very good indicator, which guarantees a decent profit from gambling in the foreseeable future.
The investment yield is provided by the high standard of living of the local population:
Most experts recommend that you get acquainted with local laws before launching a gambling project in Europe. There are many tax jurisdictions on this continent, and they all vary.
Each European country has developed clear operational conditions for the gambling industry. Simple and understandable rules make the idea of working in "grey" areas extremely disadvantageous. Private business is well-protected by the state.
Consistent tax policy allows you to plan your budget for some years to come.
Most countries in the region are not included in the list of offshore zones, which provides for the legal functioning of any gambling project on their territory. It is becoming prestigious to manage your own business in Europe, and it is respected by both users and competitors.
Before you launch a gambling startup in Europe, you need to clearly understand, in which European country the Internet business or a land-based location will operate.
The main choice factors are:
Depending on the availability of permits, European countries can be divided into several categories.
Gambling regulation in Europe:
The license of a local regulator
Austria, France, Germany, Italy, Netherlands, Spain, United Kingdom
Permits of any jurisdiction are considered valid
Cyprus, Luxembourg, Czech Republic, Serbia, Slovakia, Luxembourg, Malta
For companies registered in the country, there is a license granted by local authorities; for everyone else ― a permit of any jurisdiction
Greece, Ireland, Latvia, Lithuania, Portugal, Sweden, San Marino
Casino games are strongly prohibited
Any gambling activity in the EU should be regulated by EU laws. However, not all market participants agree that the profit from the issuance of licenses should go to the united treasury of the EU. Therefore, some countries (such as France or Italy) have formed local commissions that grant licenses and allocate expenditures from them.
On average, a permit is issued for a period of 20-30 years and costs from 400 thousand euros (for example, in Austria) for land-based gambling establishments. For the online business, the cost of a license is lower but still, it cannot be called really low.
The amount of taxes depends on the specific country. The most profitable in terms of investment are Malta and Cyprus.
In Cyprus, the existing tax of 15% is applied to the monthly gross income from a casino. If this is a land-based gambling establishment, then all revenues from the related restaurants and bars will be also subject to VAT.
Malta uses two types of taxation: business to business (B2B) and business to consumer (B2C). The first category of enterprises is completely free of tax (you will only need to obtain a license), and as for the second category ― 7,000 euros need to be transferred to the state treasury monthly.
Other jurisdictions do not have a loyal approach. In Germany, for example, operators transfer 30-45% of the monthly turnover to the public treasury. In France, the deductions are set at almost the same level.
The market of Eastern Europe remains the most promising in terms of investment. The governments of Poland, Romania, and Bulgaria intend to implement a series of laws, the aim of which is to ease the tax pressure on operators. Experts expect that already in 2021, the promising Ukrainian market will open.
The process of launching a gambling project can be divided into several main steps:
The European market remains a tidbit for most investors since it brings decent profit, guarantees legal work, and increases the prestige of operators. At the same time, the launch of a gambling project is always connected with certain risks and significant financial expenses.
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