Armenia Implements Higher Fees for Online Gambling

Armenia Implements Higher Fees for Online Gambling

Armenia is moving forward with a new regulatory framework for online gambling, introducing a series of fee increases that will take effect in the coming years. The National Assembly has approved a bill that will double the fees for licensed operators starting April 1, with additional increases scheduled annually. The government has also committed to creating a new regulatory body to oversee gambling operations in the country.

These changes signal a shift in how Armenia intends to manage its gambling industry, with a focus on higher state revenue and stricter oversight. However, industry stakeholders have raised concerns about the potential consequences of this policy shift, particularly regarding the sustainability of licensed operations and the possibility of increased activity on unregulated platforms.

The legislation was introduced by Hayk Sargsyan, a member of the ruling Civil Contract Party, and was initially dismissed before being revived by Prime Minister Nikol Pashinyan. The bill aims to increase state revenue by approximately AMD 13 billion (€32 million) annually, addressing concerns about the financial contributions of the online gambling sector.

Under the revised framework, operators will face incremental increases in licensing fees over the next four years. The first change will take effect on April 1, 2024, when fees will double for online casinos and sports betting platforms. Additional increases will follow:

• January 2026 – Fees will be three times the current rate.
• January 2027 – Fees will rise to four times the current rate.
• January 2028 – Fees will reach five times the current rate.

A proposed 10% turnover tax for online casino operations was initially included in the bill but was later removed following discussions in a final hearing on March 6. Instead, lawmakers agreed on provisions requiring the creation of a regulatory authority and a new gaming operator framework, intended to bring greater oversight to the industry.

Supporters of the legislation argue that the gambling industry has grown significantly over the past decade, and state contributions from the sector have not kept pace with its expansion. Sargsyan noted that online casino turnover in Armenia has increased from AMD 14 billion in 2010 to AMD 6.3 trillion (€15.3 billion) in 2023, while tax revenues and licensing fees collected from the sector have grown at a much slower rate, reaching AMD 33 billion.

The government has framed the new fee structure as a way to align the industry's financial obligations with its actual market presence, ensuring that a greater share of its revenue is directed to state funds. Another stated goal is to address concerns related to gambling addiction, with lawmakers suggesting that higher fees could act as a deterrent by reducing overall participation in gambling activities.

Despite the government's justifications, the new legislation has raised concerns within the gambling industry and beyond. The Ministry of Finance has warned that a sharp increase in fees for licensed operators may lead to unintended consequences, particularly a shift in player activity toward unregulated online platforms that do not fall under Armenian jurisdiction.

If regulated operators adjust their business models to account for higher fees—such as by reducing player incentives or lowering payout rates—consumers may turn to offshore operators, which may not adhere to responsible gambling policies or taxation requirements. Such a trend could undermine consumer protection measures while reducing the anticipated gains in state revenue.

From a business perspective, the gradual fee increases may affect the market structure, potentially leading to consolidation among gambling operators. Larger companies with greater financial resources can absorb the additional costs, while smaller operators struggle to remain competitive. This shift could reduce competition, influencing the industry's evolution under the new regulatory environment.

Introducing a regulatory authority could also bring additional changes to market dynamics. While the details of this body's structure and authority have not yet been outlined, its establishment could lead to new compliance requirements for operators, adding another layer of complexity to the evolving regulatory framework.