Gambling games in Latvia

Lotteries

There is only one State monopoly lottery operator, which is the joint-stock company Latvijas Loto. There are 106 full-time employees in Latvijas Lotto and this number has been steadily increasing over previous years. It is anticipated that employment will reach 115 in 2009.

Latvijas Loto’s tickets are sold across a network of more than 1,400 points of sale across the nation via direct and indirect partners/agents. During 2003 the value of the Latvian lottery market reached approximately LVL 5.3m (€7.5 million).

The National Lottery is also subject to an additional state duty of LVL 10,000 (€14,200) for the issuance of a license for number lotteries and LVL 6,000 (€8,600) for instant lotteries. Regional lotteries pay an LVL 500 (€711) license fee. The tax for number lotteries is 8% of turnover (tickets sold) and for instant lotteries is 10% of turnover. Latvijas Loto pay 27% of the profits to the state budget for use of state capital. In addition, according to Latvian legislation, high winnings above LVL 500 (€711) are subject to 25% income tax.

At one time there were four or five small scale private companies that organised lotteries on a regional scale in Latvia. However, during 2003 these companies have disappeared and Latvijas Loto is now the only operator in lottery market.

Casino Gaming

Between 2000 and 2004 the number of casinos in Latvia decreased from 22 to 15. This is largely due to additional costs imposed on casinos by the Lottery and Gambling law, which requires the following standards:

Numbers of tables must be at least 10 (roulettes and card tables) for casinos in Riga (the Capital city) and at least 5 tables for casinos outside Riga;
There must be video surveillance systems in casinos;
Registration and identification of visitors must be present in Latvia in compliance with the provisions of the “Money Laundering” Directive.

Therefore, it became not profitable to operate small casinos and casinos outside big cities. During 2004 and 2005 casinos were operated by eight companies.

Table game revenues are quite limited. During 2003 casino table GGR were LVL 5.0m (€7.1m). Gaming machine GGRs are included in the following section.

Under the Latvian law on “Lotteries and Gambling” each casino operator must purchase a license at a cost of €28,450 each year plus fixed taxes on each table as well as a tax on GGR of 25%. Since January 2004 casino inspectors participate in casinos’ every day accounting procedures. Casinos do not pay VAT in accordance with Latvian normative acts.

The amount of tax that operators pay is weighted according to the location of the property, as follows:

Gambling fixed taxes on each table and machine (per year) are as follows:

– slot machines, that are in casinos and gaming halls – €1,200;

– roulette tables – €28,200;

– card and dice tables – €6,830;

Other state duties (per year) are:

– for organisation and operation of slot machines, bingo, roulette, cards and dice games for issuance of the special license (when first coming into the market) – €427,000;

– yearly re-registration of the special license – €35,600;

– permission to operate a casino – €28,500;

A gambling fee (payment for the special license) is paid in the state budget, while 75% of revenues from the gambling tax are to be paid in the state budget and 25% in the budget of the local municipality. There are no special investment requirements for casino operators in Latvia.

Machine Gambling Outside Casinos

By 2004 Latvia had a total of 12,668 machines in operation across its 15 casinos and 616 gambling halls. This had risen from 7,255 machines located in 22 casinos and 106 gaming halls during 1997.

Gambling may be organised only within casino, gambling halls, bingo halls, as well as in venues of totalizator or bet stakes reception desks, when the relevant license of venue for arrangement of gambling is received. Operating of gambling slot-machines and equipment are permitted only when registration and marking has been carried out.

Games of chance may be arranged only in the locations and under the procedure provided by law:

in bars and coffee-houses (no more than 5 slot-machines);
in game-halls (at least 10 slot machines);

Operation of gambling slot-machines and equipment are be permitted only when registration and marking has been carried out.

Betting

There was no horserace betting licenses in Latvia until 2000 when a tote license was awarded. The cost of a totalisator license is €42,600 per annum. Sports betting has also since been legalised in Latvia. However, there are no tradition, experience and knowledge from inhabitants of Latvia to participate Toto or betting activities.

Bingo

Bingo games are not very popular in Latvia. Therefore untill 2003 there was only one Bingo operator in one Bingo Hall. From 2003 there are two operators with three halls in Latvia.

Sales Promotional Gambling

On 8 July 2003 the Parliament of Latvia accepted the Law on Lotteries of Goods and Services, which became effective on 1 January 2004. It is defined in the Law on Lotteries of Goods and Services that if a company producing, distributing or selling goods or providing services and for the purposes of distributing those goods or services wishes to arrange a lottery (including also mass media), it needs to get permission or should receive a confirmation concerning entering onto a register. When the prize fund announced by the lottery of goods or services is larger than €710, the lottery organizer should receive permission by submission of accurate rules of the lottery. When the prize fund announced by the lottery of goods or services is smaller than €710, the lottery organizer should notify the Inspection about the envisaged lottery.

It is clarified that pursuant to the law “On Taxes and Fees” the prize exceeding €710 is subject to the population income tax in an amount of 25%. Therefore the prize fund exceeding €710 shall be subject to the state fee of 25% from the total amount of the prize fund and shall be paid by the lottery organizer prior to receipt of the permission. Subject to requirements of the Law on Goods and Services, income from the said fee shall be transferred to the fund for construction of the National Library of Latvia.

Since 1 January 2004, when the Law on Lotteries of Goods and Services became effective, the Inspection has issued:

643 lottery permissions (for lotteries prize fund where it is larger than €710, as well as lotteries arranged by the press editions);
333 lottery confirmations (for lotteries prize fund where it is smaller than €710).

The total prize fund which was subject to a state fee was €1,878,000 and the state fee collected constitutes €470,000. The law also forbids the organisation of trade lotteries for advertising alcoholic beverages, tobacco, pharmaceutical products and beer, and notes that these types of goods cannot be included as prizes in a lottery.

Income from the said fee is used for implementation of the design of the National Library of Latvia pursuant to provisions of the Law on Lotteries of Goods and Services.

Revenues from the national lotteries tax are to be paid in the state budget, but revenues from local lotteries tax – in the budget of the municipality where the lottery is organised.