Economics of Gambling in Lithuania

Traditionally gambling, with the exception of lottery, has not been permitted in Lithuania due to the strong Catholic influence in the country. However, gaming was legalised in Lithuania the Gaming Law became effective in July, 2001.This Law established the conditions and procedures for the operation of gaming in the Republic of Lithuania of such types as machine gaming, bingo games, table games (roulette, card and dice games), totalizator and betting.

Amendments to the Law were made on 1 September 2002. One of the main changes brought by amendments were introduction of gaming machine categories (category A – gaming machines of unlimited payouts, which can be operated only in casinos; and category B – gaming machines with limited payouts, which can be operated only in gaming machine halls) (Source: GBGC Report)

Lithuanian Gambling Market Structure 2004 (excluding lottery):

Source: State Gaming Control Commission, Annual Report 2004 (From the submission to the Enquiry from State Gaming Control Commission of the Republic of Lithuania)

The Dynamics of the Revenue Structure According to the Types of Gambling 2002 – 2004 (excluding lottery):

Games >>> 2002 year, % >>> 2003 year, % >>> 2004 year, %
Gaming tables >>> 58.48 >>> 69.17 >>> 53.55
A category machines >>> 41.24 >>> 22.01 >>> 17.38
B category machines >>> 0.07 >>> 4.45 >>> 15.76
Betting centres >>> 0.21 >>> 4.05 >>> 13.19
Bingo >>> >>> 0.32 >>> 0.12

Source: State Gaming Control Commission, Annual Report 2004 (From the submission to the Enquiry from State Gaming Control Commission of the Republic of Lithuania)

The Changes of the Market Structure:

Note: Statistics on category A gaming machines and on gaming tables are not available.

Source: Lithuanian NGGBA (National Gambling and Gaming Business Association) publication in EUROMAT

During the year 2004 the share of the market of B category machines increased by 11.3% and the share of betting increased by 9%. However it is clearly seen that they still have only a small portion of the market, and that the gaming houses establishments (casinos) still dominate the market.

NGGBA (National Gambling and Gaming Business Association) is the oldest and largest gambling and gaming business association in Lithuania. From the end of 1994 NGGBA strived for the legalisation of gambling in Lithuania and actively participated in this process. In May 2001, gambling in Lithuania was legalised.

NGGBA unites some of the companies who have licenses to organise gambling on B category machines, the betting companies, the main gaming business representative companies, and those companies importing and repairing gambling and gaming equipment. Another association, joining casino gaming operators and one betting operator is the Association of Lithuanian Gaming Operators. Betting company Top Sport, being a member of NGGBA, together with another betting company Orakulas founded the Association of Betting Operators.

The State Gaming Control Commission of the Republic of Lithuania (hereinafter – Control Commission) is licensing and supervising the activity of subjects operating gaming in the Republic of Lithuania. Control Commission also controls how gaming operators follow the requirements of the laws and other legal acts regulating gaming operations since July 2001. Furthermore, the Control Commission controls and supervises national lotteries since January 2004

Note: betting is considered a type of gaming and is organized and regulated according to the Gaming Law. Prior to this, the Lithuanian Finance Ministry had supervised the lottery sector. Also at this time Lithuania’s investment laws were changed making it far more attractive for foreign companies to invest directly within the nation.

The taxation period in Lithuania is quarterly. Gaming establishments (casinos) and gaming machine halls pay taxes according to the number of gaming machines: for each gaming table the tax is 12,000LTL (€3,400), for category A machines (in casinos), 1800LTL (€521), and for category B machines (in gaming machine halls) 600LTL (€174) per quarter. The organisers of bingo, totalisator, and the betting, pay 15% tariff from the gambling taxes base (GGR, the difference between pay-in and pay-out). The organisers of the lotteries pay 5% from the value of the distributed lottery tickets.

The State Gaming Control Commission was established to ensure the protection of the interests and rights of gamblers and gambling operators. Compulsive gamblers are not protected as a separate customer group at a legal level, but industry officials are looking at ways to address this issue. Currently, the Control Commission does not finance the prevention and treatment of problem gambling.

Lithuanian Gambling Tax Contributions by Gambling Type 2004:

Source: State Gaming Control Commission, Annual Report 2004 (From the submission to the Enquiry from State Gaming Control Commission of the Republic of Lithuania)

There is a fixed tax from each equipment item of the gambling market (gaming machines category A and B, gaming tables, bingo device). The amount of levied taxes, other conditions being equal, mostly depends on the number of equipment items in the market.

During 2003 there were six companies that among them operated Lithuania’s 30 gaming arcades and 13 casinos. A Lithuanian gaming license is issued to an organisation for an unlimited period of time upon payment of the appropriate fees.

The Number of Gambling Operators 2002 – 2005:

Source: Submission to the Enquiry from State Gaming Control Commission of the Republic of Lithuanis and Lithuanian NGGBA (National Gambling and Gaming Business Association) publication in EUROMAT.