The Association of Licensed Gambling Operators in Latvia (LLAB) has hit out at plans to increase gambling tax in the country, warning it could instead result in a decline in tax revenue and lead to the closure of more than 20 gambling venues nationwide.
In September, Latvia’s government announced plans to bring forward planned gambling tax increases by 12 months to 1 January 2026. The higher rates were originally set to commence on New Year’s Day 2027, under plans approved in December 2024.
The increases would see tax on interactive gambling and telephone-based betting revenue in Latvia rise from 12% to 15% of GGR and 15% to 18%, respectively.
Annual gaming machine taxes would rise from €6,204 to €7,440. In addition, contributions on roulette, card and craps tables would increase from €33,696 to €40,440 per year.
The Ministry of Finance estimated the tax increases would raise an additional €9.2 million. However, this has been called into question by the LLAB. The body said tax income in Latvia would fall as a result of the higher rates.
Concerns over gambling venues
This decline, it said, would be due to the closing of venues that would not be able to cope with increased taxes. It forecast over 20 gaming halls and 10 card or roulette tables could close in 2026. In turn, this could lead to a tax deficit of €2.5 million ($2.9 million).
The LLAB also noted how gambling tax in Latvia had already increased recently, rising 20% in early 2024. This, it said, led to the closure of 24 gambling halls, and the association warned that this number would increase should taxes rise again.
“By raising the tax rates on gaming halls and machines, the promised budget increase will not happen,” said Juris Celmārs, representative of the LLAB and chairman of SIA Olympic Casino Latvia. “On the contrary, budget revenue will decrease.”
LLAB hits at ‘misleading’ tax forecasts in Latvia
The LLAB highlighted how the gambling tax increase had been brought forward without consultation with the industry. In addition, it accused the government of making “misleading” forecasts about the expected impact of higher tax rates.
“Not only are the principles of good governance not followed, but misleading forecasts have also been made about the impact of tax changes on budget revenues,” the LLAB said.
“They were made without taking into account market rules and trends: a decrease in turnover in the land-based segment and a significant drop in the number of gambling halls.”
Going into more detail on the expected impact of tax hikes, the LLAB noted how the number of gambling halls in Latvia had fallen by more than 70% in the past 20 years. In 2005, there were 327 halls, whereas by June this year, only 168 remained.
Alongside this has been a drop in slot machine numbers, with the LLAB saying this is “consistently decreasing”. Some 4,916 machines were active in January 2024, although this fell to 4,037 by September of this year.
Lower venue and machine numbers, the LLAB said, has also had an impact on revenue from the land-based sector. It said machine revenue fell 12% in H1 this year, to €55 million.
It was a similar story for gaming tables, the organisation said. Revenue from games such as roulette and blackjack dropped 12.5% year-on-year in H1 to €4.7 million.
The Latvian government is trying to raise €565 million in additional funds for security, family support and education in the budget for 2026. A package of draft laws relating to the budget – including the gambling tax increases – will be submitted to parliament for approval on 15 October.
Concerns over lower tax come after similar changes were implemented in the Dutch market, with data suggesting this could lead to a drop in tax income. In August, figures from the Licensed Dutch Online Gambling Providers (VNLOK) trade body showed gross gaming revenue in the first half of 2025 will be down 25% compared to last year.
As such, tax revenue will be at 83% of the revenue collected from the same period in 2024, despite a 4% tax increase to 34.2% of GGR from 1 January. The rate for operators is set increase further to 37.8% of GGR tax from 1 January 2026.
Tax on various types of gambling in Latvia is set to increase from January 2026.