Latvia gambling industry warns of closures as government fast-tracks tax rise

Latvia’s gambling industry has warned that government plans to raise gambling taxes from January 2026 could lead to a wave of venue closures and a decline in overall tax revenue, as operators struggle with mounting costs.

The government last month proposed bringing forward gambling tax increases by 12 months to January 2026, a move it expects will generate an additional €9.2 million ($10.67 million) in revenue.

Under the proposal, the tax on interactive gambling would rise from 12% to 15% of gross gaming revenue (GGR), and telephone-based betting from 15% to 18%. Annual taxes on gaming machines would increase from €6,204 to €7,440, while roulette, card and craps tables would be taxed €40,440 per year, up from €33,696.

The Association of Licensed Gambling Operators in Latvia (LLAB) criticised the plan, saying higher rates could instead result in the closure of more than 20 gaming halls and 10 card or roulette tables next year, reducing tax income by an estimated €2.5 million ($2.9 million).

“By raising the tax rates on gaming halls and machines, the promised budget increase will not happen,” said Juris Celmārs, LLAB representative and chairman of SIA Olympic Casino Latvia. “On the contrary, budget revenue will decrease.”

The industry body accused the government of failing to consult operators and of producing “misleading forecasts” about the fiscal impact of the measures. “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.

The group added that officials had ignored market trends, pointing to a long-term decline in the number of gambling venues and machines. The number of gaming halls in Latvia has fallen more than 70% over the past two decades, from 327 in 2005 to 168 as of June this year. Slot machines have dropped from 4,916 in January 2024 to 4,037 by September 2025, while land-based gaming revenue fell 12% year-on-year in the first half of 2025 to €55 million.

Latvia’s government is seeking to raise €565 million in additional funds for security, family support and education as part of its 2026 budget. A package of draft laws, including the gambling tax increases, is due to be submitted to parliament on October 15. 

The warning from Latvian operators follows similar developments in the Netherlands, where a 4% tax increase earlier this year was followed by lower gross gaming revenue and a decline in tax receipts to 83% of 2024 levels.