Legal and regulatory frameworkiLegislation and jurisprudence
Latvia gained full independence from the Soviet Union in 1991. The country's gambling industry was largely unregulated before this time. In 1998, government officials here established the first true set of gambling laws, named the Lotteries and Gambling Supervisory Authority.
That year, the government created the Control Department to oversee the gambling industry. This group collects tax fees from gaming operators. The Licensing and Financial Analysis Division of the government is responsible for granting licenses to casino operators in the country.
The same set of gambling laws remained in place for several years. In 2005, Latvia launched the Gambling and Lotteries Law. This created a new framework for both land-based and online gambling companies to legally operate inside the country.
Thus, all the basic legal framework referred to gambling in Latvia was set out in the Law on Gambling and Lotteries. Gambling fees and taxes are regulated by the separate Laws, the Law on Lottery and Gambling Fee and Tax and the Law on Personal Income Tax.iiThe regulator
Gambling in Latvia is regulated by the Lotteries and Gambling Supervisory Authority in accordance with The Cabinet and its stipulated procedures, as well as with the State Revenue Service (procedures laid down in the Law on the State Revenue Service), and with the police (procedures laid down in the Law on Police).
The Authority implements state policy in the organisation of gambling and lotteries, performs licensing, supervision and control of gambling and lottery organisers, as well as gambling service providers, develops draft regulatory enactments concerning the organisation of gambling and lotteries, ensures systematic accounting and statistical analysis of the gambling and lotteries market, registers gambling machines and equipment and provides state and local government institutions with the information necessary for the administration of the gambling and lottery tax, ensures the operation of the unified gaming machine control and monitors the system by using online data exchange with gambling organisers and maintains the self-restricted persons register.iiiRemote and land-based gambling
The legal system distinguishes between remote and premises-based gambling. Remote gambling is defined as interactive gambling, and the player must participate in it by using electronic communication services in order it to be referred as interactive one.ivLand-based gambling
Gambling may be organised only in casinos, gaming halls, bingo halls and betting or betting places, if the relevant licence of the gambling venue has been obtained.
A casino, a gaming hall, or a bingo hall is a place for organising gambling that is marked in the technical inventory plan of a building as a constructively separated room or several interconnected rooms. A casino is specially equipped for the organisation of slot machines, roulette (cylindrical games), card and dice games and must have at least 10 gaming tables, if the casino is located in Riga, or five gaming tables, if the casino is located outside Riga.6
It is prohibited to install and operate roulette (cylindrical games), card and dice game tables outside the casino. All gambling equipment located in a casino shall be owned by the capital company that has received the licence for the relevant gambling venue.
A gaming hall must have at least 20 gaming machines installed and operated. Only gaming machines owned by a capital company or purchased on the basis of a financial leasing agreement with the relevant issued licence may be installed in the gambling hall.7
Gaming machines may be installed and operated only in casinos and gambling halls. They may be operated only if they are interconnected in a single network of a gaming machine control and monitoring system, ensuring online data exchange with the Authority.
The premises for a betting or a wagering shop are the gambling premises marked in the building's technical inventory plan as a space or part of that space where bets for betting or wagering are accepted.vRemote gambling
An online gambling operator can lawfully provide its services to a customer located in Latvia only if it has a valid gambling licence. There are two types of gambling licences that are available to the operators:
- a fully fledged gambling licence, which enables an operator to provide its services both land-based and online; and
- an interactive gambling licence, which enables an operator to provide its services online only.
The organisation of gambling through electronic communications services shall be deemed to be the organisation of games of chance in which participants perform any activities necessary for participation in those games by electronic communications services.
It is permitted to organise slot machine games, roulettes (cylindrical games), card games, dice games, bingo, wagering, betting and games of chance by telephone (i.e., interactive gambling) through electronic communication services. It is permitted to accept bets on betting or betting through electronic communications services. The total value of winnings in interactive roulette (cylindrical games), card or dice games may not be less than 80 per cent of the total bets placed.
The organisation of interactive gambling and the acceptance of bets is permitted only after the receipt of the relevant license issued by the Authority.8
There is a separate licence for the specific operations of the software providers (B2B) – live dealer studios located in the territory of Latvia.viAncillary matters
Gambling machines and equipment, as well as gaming machine game programs that have been registered and certified may be installed and operated in Latvia. Each game, gaming machine and piece of equipment has to be registered with the Authority, assigning each gaming machine and piece of equipment its own identification number, which remains unchanged throughout the its operation. Issuance of an identification number to a gaming machine and equipment is a paid service provided by the Authority.
Certification is an Authority competence in which it is determined whether a gaming machine, its model and its gaming program comply with the standards of the manufacturer and the requirements of the regulatory enactments of Latvia.
A certification body accredited by a national accreditation body in accordance with regulatory enactments regarding the assessment, accreditation and supervision of conformity assessment bodies or another Member State of the European Union may certify a gaming machine, equipment, gaming machine game program, interactive gambling organisation system and interactive lottery organisation system. European Economic Area and European Free Trade Association national accreditation body for the right to perform testing and certification in the relevant field.
The registration of a gaming machine, equipment and gaming machine game program shall be performed in accordance with the procedures specified by the Cabinet. The Cabinet shall determine the information to be included in the certificate of conformity of a gaming machine, equipment and gaming machine game program.viiFinancial payment mechanisms
Payment service providers are required to observe a blacklist of unlicensed gambling operators. The gambling regulator provides a list of unlicensed operators to payment service providers.
Lotteries and gambling tax shall be paid by a capital company that has received a special permit (licence) for the organisation of lotteries or the necessary licences for the organisation of the relevant gambling in accordance with the procedures prescribed by law.
The object subject to the gambling tax is the gambling organiser – a capital company, a gambling venue and gaming equipment. A tax shall be levied on each direct or installed gambling venue at the following rates for each current calendar year:
- roulette (cylindrical game) – for each gaming table connected to the roulette rotating device – €28,080;
- card and dice games – for each table – €28,080;
- gaming machines – for each gaming machine at each gaming venue – €5,172;
- games of chance over the telephone – 15 per cent of the revenue from the organisation of this game;
- sweepstakes and betting – 15 per cent of the revenue from the organisation of this game;
- bingo – 10 per cent of the revenue from the organisation of this game; and
- if gambling is organised using telecommunications, the gambling tax, regardless of the type of game, is 10 per cent of the revenue from the organisation of that game.14
By the first day of each month, the gambling organiser shall notify the Authority of the number of gaming machines and gaming tables to be operated in the relevant month at each licensed gambling venue. The gambling organiser may move a gaming machine or gaming table to another gambling venue within a calendar month, without changing the total number of gaming machines and the number of gaming tables in each specific gambling venue announced by the first day of each month.
The lottery and gambling winnings shall be added to other taxable income of a natural person. However, lottery and gambling winnings, if the amount of the winnings during the taxation year does not exceed €3,000, shall not be included in the annual taxable income and shall not be taxed.15