RIGA discusses Latvia’s market
Latvia is hosting the international conference Riga Gaming Congress on October 12.
Latvia.- Gambling in Latvia is one of business areas, showing a steady growth. According to the results of 2016, the industry is ready to enter a pre-crisis level; however, changed government policy towards the gambling sector challenges not only its development but also its existence within legal environment. Market analysts are trying to find out whether the gambling business provides Latvia with benefits or whether its development is indeed related with harmful consequences for the country.
This gambling situation is still disputable. The Latvian Association of Gaming Business (noncommercial association) and government are engaged in a tough talk. Thus, the main topic of Riga Gaming Congress international conference, which will be held on October 12, is gambling business prospects in Latvia. Is there a future for Latvian gambling? Experts from various countries and industries will answer this question.
Latvia hosts 315 gambling halls, operates 8826 registered slot machines, has 6 land-based casinos and 183 gambling tables. The majority of venues are located in Riga. Gambling business owners make significant investments in the industry. Over the past 5 years, investments have reached around €102 million and been used for safety control, real property purchase, acquisition of new games and slot machines and reconstruction of gambling halls.
2016 was an especially successful year for the Latvian gambling sector, completing with the turnover of €264 million (a little less than the pre-crisis record: €264 million in 2007). €29.1 million of that sum went to the state treasury and €7.9 million to local self-governments.
Latvia was attractive for gambling organisations until 2017 due to the fixed tax rate and absence of double taxation. But now, the government is starting a tax overhaul, supposing the increase of gambling taxation. In 2017, one also adopted a prohibition on locating gambling halls in the historic city center, save for territories of major hotels.
The Ministry of Finance has plans for the income tax on lottery winnings, 20 percent dividend tax and increase of gambling business taxation up to 30 percent. If the amendments are approved, they will be accepted this fall. Industry experts believes that it will lead to the decrease of the amount of gambling halls, reduction of staff and cutting of wages. According to some forecasts, the legal industry will be destroyed and this sector will become shadow. Meantime, research shows that the gambling development not only has a disastrous influence on the economy and social aspect but also provides significant benefits.
Not only does legal gambling play an entertainment role, but it also brings a huge sum to the budget in terms of tax liabilities. Adopting laws on gambling restrictions, authorities were going to compensate expected state treasury losses by increasing the excise tax on fuel, cigarettes and spirits. However, €29.1 million (and €7.9 million for municipal governments) is quite a significant sum for the country with the budget of €8.066 billion for 2018.
