The Association of Licensed Gambling Operators in Latvia (LLAB) has strongly criticized the government’s proposal to increase gambling taxes, warning that this move may lead to a decrease in tax revenue and cause the closure of over 20 gambling venues across the country.
In September, the Latvian government announced its intention to implement the scheduled tax hikes a year earlier than planned, moving the start date from 1 January 2027 to 1 January 2026. These hikes had originally been approved in December 2024 and included tax increases on interactive and telephone-based betting revenues from 12% to 15% and 15% to 18% respectively.
Moreover, the annual taxes for gaming machines are set to rise from €6,204 to €7,440. Taxes on roulette, card, and craps tables will also increase from €33,696 to €40,440 per year. The Ministry of Finance has projected that these adjustments would generate an additional €9.2 million in tax revenue. However, the LLAB disputes these figures, asserting that the eventual outcome will be a reduction in tax income due to the higher rates.
The LLAB has expressed grave concerns that many gaming venues will be unable to sustain themselves under the increased tax burden, predicting that over 20 gaming halls and 10 card or roulette tables could cease operations by 2026. Such closures could result in a tax revenue shortfall of approximately €2.5 million.
The association highlighted that gambling taxes in Latvia have already seen a 20% increase earlier in 2024, which led to the closure of 24 gambling halls. They warn that the proposed hikes will exacerbate the situation further. Juris Celmārs, a representative of the LLAB and chairman of SIA Olympic Casino Latvia, noted that increasing taxes on gaming halls and machines is unlikely to result in the promised budget increase. “The opposite will happen; budget revenue will decrease,” he emphasized.
The LLAB has taken issue with the government for advancing the tax hike without consulting the gambling industry. It has accused the government of making “misleading” forecasts regarding the impact of the higher taxes on budget revenues. “Principles of good governance have been overlooked, and forecasts were made without considering market dynamics: a downturn in the land-based sector and a significant decline in the number of gambling venues,” LLAB stated.
The LLAB provided further insights into the declining state of the gambling industry in Latvia, noting that the number of gambling halls has plummeted by over 70% in the past two decades. From 327 halls in 2005, only 168 remained as of June this year. Slot machine numbers have also seen a consistent decrease—from 4,916 machines in January 2024 to 4,037 by September of the same year. This reduction has directly impacted revenue from land-based operations, with machine revenue dropping 12% in the first half of the year to €55 million. The same trend was observed with gaming tables, where revenue from games like roulette and blackjack fell by 12.5% year-on-year in the first half of the year, amounting to €4.7 million.
The Latvian government’s broader fiscal goals include raising €565 million for security, family welfare, and education in the 2026 budget. A package of draft laws tied to the budget, which includes the gambling tax hikes, is set to be submitted to parliament for approval on 15 October.
These developments in Latvia echo similar concerns in the Netherlands, where recent tax changes have also led to lower tax revenue. Data from the Licensed Dutch Online Gambling Providers (VNLOK) indicated a 25% drop in gross gaming revenue in the first half of 2025 compared to the previous year. Consequently, tax revenue for this period is expected to be only 83% of the revenue collected in the same timeframe in 2024, despite a 4% tax increase to 34.2% of the gross gaming revenue at the beginning of the year. The tax rate for operators is slated to rise further to 37.8% from 1 January 2026.
The gambling industry in Latvia is thus at a critical juncture, balancing between the pressures of government fiscal policies and the operational viability of its venues. While the government argues that the tax hikes are necessary for broader budgetary goals, the industry fears that these increases will stifle growth and lead to further shrinkage in an already contracting market. The LLAB’s criticism underscores a need for a more nuanced approach that considers the industry’s current economic challenges and engages stakeholders in crafting sustainable fiscal policies.
Topics: Netherlands · Blackjack · Land-Based Casinos · Gambling Taxes · Financial Results · Online Casino
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