The Latvian government’s recent decision to advance the gambling tax increase by one year — from 2027 to January 1st, 2026 — has drawn sharp criticism from the country’s licensed gaming operators, who warn that the change could have a “direct impact on sponsorship agreements and financial support for Latvian sport.”
Originally, the Cabinet of Ministers had approved the tax hike to take effect in 2027. However, an amendment passed at the end of September means that the new rates will now apply a year earlier. The revised legislation, reviewed at the September 30th Cabinet meeting, is part of a broader effort to raise an additional €9.2 million in state revenue for 2026 — a figure representing nearly 20% of the entire national “Sports” budget programme for that year.
Under the amended law, tax rates for betting and totalizators will rise from 15% to 18%, and for online gambling from 12% to 15%. While the increases align with levels in several EU countries and were generally accepted by Latvian operators when first proposed, the earlier implementation has caused frustration.
According to the government’s legal justification, “the restriction of fundamental rights contained in the bill pursues a legitimate aim, as it serves the public interest by ensuring additional revenue for financing government priorities.”
Industry calls out lack of consultation
The Latvian Licensed Gambling Association (LLAB) expressed disappointment over what it called “unplanned and uncoordinated policy-making.” LLAB executive director Līga Līce told Sportacentrs.com that “the new tax increase from January 2026 is being implemented without any consultation with the industry and without regard for investors and business operators.”
She added that government projections of €9.2 million in extra revenue were “misleading and economically unfounded,” noting that the Ministry of Finance had failed to account for “a shrinking on-site gambling market and a substantial decrease in the number of gaming halls.” LLAB warned that higher tax rates could instead cause “more than 20 gambling halls and 10 table-game venues to close in 2026,” potentially reducing state revenue from this segment by €2.5 million, down from €25 million to about €22.5 million.
Fears over impact on Latvian sport
Beyond the fiscal implications, industry leaders and sports officials are concerned that the changes could undermine sports sponsorships — a crucial funding source for national leagues and teams. Betting companies are currently the main title sponsors of Latvia’s top men’s leagues in hockey, basketball, and football.
Optibet, for example, serves as the general sponsor of the Latvian Hockey League, a partner of the national men’s hockey team, and title sponsor of the Latvian–Estonian Basketball League. With the new taxes, operators may have to scale back marketing and sponsorship spending, jeopardising long-term contracts with sports organisations.
Latvian Ice Hockey Federation (LHF) general secretary Roberts Pļāvējs acknowledged that while no immediate sponsorship changes have been announced, “the legal amendments will likely leave their mark.” He added: “We’ve already been in discussions with gambling sector representatives as part of a separate legislative process concerning advertising regulations.”
Pļāvējs also warned about the broader funding crisis: “State financing for federations hasn’t increased in ten years — in fact, it’s decreasing — while costs continue to rise. The Latvian Hockey Championship is funded entirely by us and our private sponsors. Without a general sponsor, organising it would be difficult. And this problem doesn’t affect us alone, but several leagues and national teams.”
He added that the government’s approach seemed inconsistent: “A year ago, we began an initiative to regulate gambling advertising, but instead of addressing that, the government chose to simply raise taxes. That limits operators’ ability to support sports while giving more room to unlicensed companies.”
LLAB urges broader reform
LLAB emphasised that instead of targeting licensed operators, the government should “focus on combating the shadow economy” — particularly by reforming income tax rules that unfairly penalise legal platforms. The association argued that taxing the full amount of winnings, rather than net profits, drives many Latvian players to unlicensed offshore sites.
LLAB also reiterated its call for a relaxation of Latvia’s complete gambling advertising ban, which it described as “unique in the Baltics and counterproductive.” The organisation stated that “licensed operators cannot effectively compete with unlicensed companies that continue to advertise freely online,” estimating that the illegal online gambling market still accounts for more than 20% of total activity in Latvia.
According to LLAB’s estimates, if sports betting operators were at least allowed to display their registered trademarks at venues and on team kits, the sports sector could receive €3–5 million annually in sponsorship revenue — with additional benefits for local media through legitimate advertising deals.
A paradox for Latvian sport
While gambling operators have clear financial interests in maintaining their marketing presence, the controversy underscores a paradox in Latvia’s sports economy. For years, the government has urged federations to rely less on public funds and more on private sponsorships. Now, critics argue, the state is curbing the very sector that has filled that gap.
“Latvian sport has been told to stand on its own feet,” Pļāvējs concluded. “But if we cut off those who actually support it, we may soon be asking how to stand at all.”
Source: https://sportacentrs.com/citi/27102025-negaiditas_izmainas_azartspelu_likuma_rad
