Latvia’s Gambling Sector Hit by 2026 Early Tax Increase

Latvia’s betting industry is under renewed strain as the government pushes forward a gambling tax hike ahead of schedule. The decision followed only months after the last increase, prompting operators to caution that the move may contract rather than boost state revenue.

Starting in January 2026, interactive gambling will face a 15% tax on gross gaming revenue, up from 12%. Phone betting will rise to 18%, while annual slot machine fees will climb to €7,440 per unit. The sharpest jump affects table games ( including roulette and blackjack ) which will increase from €33,696 to €40,440 per table each year.

The Ministry of Finance of Latvia projects the higher taxes will generate an additional €9.2 million to fund education, family programs and national security. But industry stakeholders argue these expectations fail to reflect the current state of the market.

A Market Already in Decline

These warnings are backed by long-term trends. Latvia’s gambling industry has been steadily contracting for nearly twenty years.

In 2005, more than 300 gambling halls operated nationwide by the end of 2025, fewer than 170 remain. Slot machine numbers have also decreased from nearly 5,000 to just over 4,000. Revenue figures echo this pattern: in the first half of the year, slot income dropped 12% to €55 million and table game revenue fell 12.5% year over year.

The sector is still reeling from the 20% tax hike introduced in early 2024, which led to the closure of 24 gambling halls. Analysts forecast that the new tax rise could cause another 20 venues and about 10 tables to close, creating a €2.5 million shortfall instead of generating extra funds.

Cautionary Tale from the Netherlands

Latvian operators are highlighting international precedents to strengthen their position. Earlier this year, the Netherlands raised its gambling tax, only to see gross gaming revenue drop 25% within six months. Despite the increase, state income fell below 85% of the previous year’s total.

Industry representatives warn that Latvia could face a similar downturn if taxation moves faster than the sector can adapt.

Industry Opposition Meets Political Will

Tensions are mounting as operators accuse the government of acting without proper consultation. The Association of Licensed Gambling Operators in Latvia contends that officials are relying on unrealistic financial forecasts, overlooking clear signs of declining capacity and waning demand.

Lawmakers are set to vote on the 2026 budget plan, which includes the tax increases, on 15 October. While the government remains committed to the policy, operators caution the result could mirror the Dutch experience of fewer gambling halls, lower revenue and a surge in illegal markets.