LICENSE IN LATVIA
Currently, virtual gambling accounts for about 20% of the total gaming industry in Latvia. To spur the development of legitimate Internet projects, on June 1, 2014, all illegal establishments that did not receive a local license were banned in the country. This step pursued a simple goal – to send part of the profit received by gambling sites to the country’s treasury.
And after the blocking of all non-licensed casinos, the issue of licensing gambling portals in Latvia became very acute. According to the chief inspector for supervision of gambling establishments in the country, the income of all online casinos in 2016 alone amounted to over 18 million euros.
Compared to 2014, when licenses had not been issued yet, the profit of this industry was only 5 million euros. And this taking into account the fact that the institutions began to give part of their profits as a tax to the treasury of the country. So at the moment, a license is the only way to work legally in Latvia.
In general, the licensing system in the country is simple, but there are several pitfalls that should be taken into account.
Form of incorporation
All organizations are required to obtain a license in order to become an independent unit of the Latvian business. True, there are several nuances:
● At least 50% of the organization’s management are required to have local citizenship or be residents of the country;
● Do not forget about the age limit, all members of the board must be over 18 years old.
Tax Interest Rates
In 1994, the country adopted a law “Duties and taxes on lotteries and gambling,”, which established the amount of tax rates. Of course, since then the law has been seriously ruled, the last amendments were made in 2014.
Currently, the tax on online gambling is 15%.
In addition, there is an agreement concluded between the Latvian Association of Gaming Internet Business and the Ministry of Finance, which says that in the coming years the tax rate will not be revised.
It is worth adding that the Latvian tax policy is quite loyal, especially in comparison with many countries that also issue licenses for gambling.
Basic conditions for licensing online casinos in Latvia
To obtain a license, you will need:
● pay for the licensing process;
● all members of the management team must be of legal age.
● annually renew and timely pay for online casino licensing;
● have among the management staff half of Latvia citizens;
● upon request, provide access to the supervisor to verify the institution;
● Update software on time.
A license is issued in the following order:
● Collection of the required documents (data on the company and all management staff).
● Applying to the Gambling Supervision Inspectorate.
● Payment of state duty.
The supervisor carefully inspects the work of the gambling establishment, and in addition evaluates the performance of the installed software.
Due to the fact that some operators have various difficulties (mainly bureaucratic) with licensing of the project, every year there are more and more legal offices that help with obtaining a license in Latvia. Of course, these agencies work strictly within the framework of state law.
To date, the price of a license in Latvia – bites and amounts to 427 thousand euros. Moreover, in addition, the head of the online casino will have to pay several additional permissions, which will increase this amount even more.
A license is issued just for a year, despite the fact that a license renewal will also cost 427 thousand euros. So for small online casinos it will be quite difficult to make a profit at the first stages of its development.
Pros and cons of Latvian online gaming licensing
Among the obvious advantages of obtaining a license in this jurisdiction, we can distinguish:
● profit growth due to user growth;
● confidence that the online casino will not be blocked in the country;
● trust from users.
If we talk about the shortcomings, then this is the validity of the license and its cost, and besides this bureaucratic red tape, which can seriously delay the licensing process.
Other important and useful information.
Currently, the country is creating a unified system for electronic supervision of the gambling business, which will help reduce the risk of tax evasion to zero. The system should work soon.
Every year in Latvia, an increasing number of illegal casinos are closed, which relied on the constant creation of mirrors.
The decision to issue licenses for online casinos appeared back in 1998, but only years later this law was improved and brought to mind.
After all casinos in this jurisdiction were required to obtain a license, many operators considered that they could not cope with such high costs and decided to sell their own site.
However, all licensed casinos were able to increase their profits seriously, focusing on the honesty and transparency of all operations.