Croatia is making some big changes to their online gambling industry. For years, gaming sites based in other countries had the ability to operate in Croatia freely. This week, the Ministry of Finance announced new legislation that will require foreign gambling sites in Croatia to register with the government.
The move comes in an attempt by Croatia to generate much-needed revenue from their gambling industry. According to the government, all sites based abroad that operate inside the country without a license will be considered illegal. With a population of more than 4 million and a GDP per capita of just over 26,000 in 2018, Croatia is trying hard to earn more money.
Croatia has implemented some pretty loose gambling laws over the years. After gaining independence from Yugoslavia in 1991, they quickly legalized almost all forms of traditional gambling to help boost their tourism industry.
Croatia established a set of online gambling laws in 2010 to regulate the industry, yet most betting sites based in other countries had free reign to operate here tax-free.
Interestingly, the government announced another plan to begin regulating foreign gambling sites in Croatia all the way back in 2014. According to that plan, foreign sites operating in the country would need to apply for a license and pay a fee.
This most recent move may come in response to a huge boost in Croatian gambling revenue over the past few years. In 2016, state-run gambling sites in the country reported record revenue earnings of more than 2.7 billion Kuna.
It took nearly five years for an official plan to be put in place. Under the new legislation, foreign gambling sites will need to register with the government in order to operate freely. Sites attempting to promote their products in Croatia without a license will be considered illegal.
An exact tax amount for these sites to operate here has not yet been announced.
According to some reports, Croatia was missing out on taxing their online gambling industry worth up to two billion Kuna. That figure is not confirmed. Regardless of the exact amount, there’s no doubt they have been missing out on some valuable revenue.
The move to begin taxing the online gambling industry certainly makes sense, yet there are a few issues that may arise. Firstly, there are some arguing the additional taxes included are unfair to bettors in Croatia.
Land-based gambling establishments are able to tax up to 30% on winnings, causing many to turn to online wagering. Additional taxes online will hurt the industry, according to some.
Another issue is in the regulatory framework that Croatia implements to stop underage gambling. For years, those wanting to gamble in the country had to register on land in order to prove they were the legal age to place bets.
Online gambling sites in Europe that choose to continue operating in the country without a license won’t have the same regulations, and underage gamblers may actually be more inclined to use them.
Despite the potential issues for foreign gambling sites in Croatia needing a license to operate, most agree that this move is a smart one by the government. If the revenue reports are accurate, the government here will be earning a huge monetary boost with online regulation.
What do you think of this news? Will it affect the Croatian online gambling industry in a good or bad way? Let us know what you think in the comment section below!
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