The Baltics are rightfully considered one of the most undervalued markets in the EU. It is regulated by European legislation, many data centres operate here, and all locals are very interested in gambling.
Experts of the Casino Market studio will tell you how and why it is worth launching a gambling project in this region, what advantages the market has, and which aspects beginning entrepreneurs should pay attention to.
General State of Affairs in the Baltics
This is a territory in Northern Europe that includes 3 countries: Estonia, Latvia, and Lithuania. All of them are members of the EU and have a well-developed economy as well as a favourable socio-political environment.
The region is distinguished by a stable regulatory framework, modern infrastructure, and convenient logistics. These factors affect its investment appeal.
Businessmen put their resources into a wide variety of economic sectors, including the gambling niche. In the Baltics, the euro is used, which speeds up and simplifies mutual settlements with partners.
Features of the establishment of casino and sportsbook divisions in the region:
- Legalisation of all types of gambling. This includes the work of gaming sites, online betting shops, poker rooms, as well as bingo and keno platforms. Entrepreneurs can invest in both the ground-based and digital segments, and punters are allowed to bet on horse or dog racing and eSports.
- European law. The first offline locations with slot machines appeared in the early 1990s. After joining the EU in 2004, Estonia, Latvia, and Lithuania streamlined their legal framework in accordance with the requirements of the Union. The law protects the private sector, introduces a clear regulatory procedure, and provides guarantees for all market participants, such as operators, gamblers, and software vendors.
- Strong labour market. A huge number of programmers, QA engineers, marketers, financiers, and lawyers work in the Baltics. Thanks to this, it can be really simple to launch an iGaming startup in this region. Entrepreneurs gain access to valuable personnel. Besides, it is much cheaper to hire staff here compared to Western Europe or North America.
- Well-developed IT infrastructure. The territory is covered by a broadband 5G network. Operators get access to powerful data centres, advanced studios for live recording, and modern IT clusters.
- Broad gambling community. A huge number of software vendors, payment aggregators, and hosting providers are registered in the Baltics. Such top companies as Playtech, Ezugi, and many others started their journey here. The region hosts many industry exhibitions, events, and conferences.
- Partial monopolisation of the niche. Despite its active development, some types of entertainment are fully controlled by the state. In Estonia, for example, the exclusive right to organise online lotteries belongs to the Eesti Loto company. In Latvia, the monopolist is the Latvijas Loto brand.
Estonia
This is one of the most promising markets in the EU, which has been regulated since 1995. Until the 2010s, the industry grew thanks to land-based casinos and betting shops. After a while, the vector shifted towards iGaming.
According to the Kantar Emor Analytical Centre, the number of Estonian players increased by 2.8 times during the past 9 years. This is one of the few countries where the gambling sector did not suffer massive losses during the pandemic.
In 2020–2023, the local government has managed to double the amount of budget revenues. Tax deductions were received due to the development of the online sector. The money was used to finance sports, educational and cultural projects, as well as social support programs.
The age limit of players in Estonia varies depending on the type of entertainment:
- betting on lottery results is available to persons over 16;
- wagering in bookmakers' offices is allowed since 18 years old;
- placement of bids in offline and digital casinos is possible for gamblers over 21.
The state does not limit the number of permits that can be obtained. They are valid for 5 years and are issued by the Estonian Tax and Customs Board.
The following loyal demands are imposed on operators:
- state duty of €3,200;
- starting fee for consideration of the application of €47,940;
- the minimum authorised capital of €1,000,000.
Entrepreneurs do not have to register a company in Estonia. It is enough to open a physical office here. This approach is beneficial for the owners of international brands who are planning to expand and scale their business.
It is also necessary for them to notify the tax authorities of all changes in the charter capital structure if the share of increase or decrease exceeds 10%.
The fiscal burden in Estonia is one of the lowest in the EU, apart from the offshore jurisdictions. Owners of iGaming projects pay only 5% of NGR, as well as contributions to the social security fund for each hired employee.
Operators of land-based locations must also deduct:
- €1,278 for each card or roulette table in the gambling hall;
- €300 per slot machine;
- €31,95 for each solution that offers games of skills.
Estonia is one of the most favourable countries for opening and scaling a casino business. The key advantage of the jurisdiction is low operating costs (payment of taxes, project launch, acquisition of a licence, etc.).
Latvia
Law on Gambling and Lotteries is the main document that regulates the local industry. It allows the work of offline and online establishments, betting shops, and poker rooms. The right to organise lottery draws belongs to the Latvijas Loto company.
The certification task is performed by the IAUI authority. The Commission has been accepting applications since 2005. In 2021, its rights and responsibilities expanded because amendments to the gambling law entered into force.
To legally work in the local market, it is necessary to obtain a permit, the validity period of which is not limited. Formally, the document is issued for one year, but after that, it can be automatically extended.
The price of a comprehensive licence to provide offline and online services is €427,000, and those who want to conduct business only in the digital format should pay €200,000. For the document’s renewal, entrepreneurs will need to spend €37,000 per year.
Tax rates in Latvia are among the lowest in the European Union. Casino owners only pay 10% of GGR (monthly).
Operators of land-based locations additionally deduct:
- €28,080 for a roulette wheel or a poker table;
- €5,172 for each slot machine.
Foreign gambling brands are allowed to work in the region as long as they do not violate local laws. The website’s hosting must have the .lv domain address, and the platform must accept bets only from the country’s residents. The minimum legal age to visit an online casino or a bookmaker’s office is 18 years old.
Entrepreneurs act as tax agents for players and are obliged to transfer a fee of 31% on all profits received by users. Prizes of less than €3,000 are not subject to this requirement.
Latvian legislation counts as one of the most balanced in the EU. It protects investors, operators, and their clients.
A loyal attitude towards entertainment for money is one of the main reasons for the active development of the industry. The casino and sportsbook sector is showing a stable growth of 10.5% per year.
Lithuania
The activity of offline establishments and betting shops has been regulated since 2006 with the adoption of the Gaming Law; eSports platforms and other digital solutions were legalised only in 2016.
The main feature of the Lithuanian market is that an online gambling licence is available only to those businessmen who already own a land-based project.
The cost of an integrated permit is €260,000.
Operators also need to fulfil 2 conditions:
- form an authorised capital in the amount of €1,000,000;
- confirm the availability of a bank guarantee of €72,400.
Persons under 18 years of age are not allowed to play poker or place bets on sports events. To register and undergo the verification procedure, punters must be over 21 years old. All winnings received are subject to 18% tax.
Despite the restrictions, the Lithuanian market is experiencing rapid development. The average CAGR for the period from 2019 to 2023 was 13.1%. Experts predict that by the end of 2024, the revenue of online casinos and bookmakers’ offices will reach €335.8 million.
Such a performance is explained by the stable political and economic environment, as well as relatively low competition in the industry. Lithuania legalised the iGaming vertical later than other countries in the region, so companies have room to grow.
The local authorities are currently working on amendments to the existing law. They plan to introduce fixed annual fees and create a separate online casino licence. If the changes come into force, the permit will cost €500,000.
The Main Things about the Gambling Industry in the Baltics
This is one of the most promising territories for launching and scaling a business related to entertainment for money.
- The key benefits of working in the region include the legalisation of all types of casino activities, a strong labour market, and a powerful IT infrastructure. There is also a European legal system that protects players, operators, and investors.
- Estonia offers excellent conditions for the implementation of an iGaming project. The country has the lowest tax rates (5% of NGR) and flexible requirements for the applicants. The validity period of a local licence is 5 years.
- Latvia allows foreign brands to work in the jurisdiction as long as they follow the laws. The main condition is to obtain a local permit and carefully check the actions of users and their payments.
- The Lithuanian market is showing impressive growth rates. Entrepreneurs can apply for a comprehensive licence to operate an online resource and a land-based betting shop.
It is possible to buy a profitable iGaming platform from the Casino Market company. We offer a turnkey project implementation, a multi-tasking sportsbook portal, a universal White Label site, and other profitable solutions.
From us, you can also order the following useful services:
- drafting a business plan;
- assistance in obtaining a permit;
- installation of a payment system;
- connection of security software;
- development of exclusive HTML slots;
- promotion of a gambling project, and much more.
Have questions or want to order services?
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