How COVID-19 Affected Latvia’s Gambling Industry
While online gambling has caught on over the last few decades, the lockdown due to the global pandemic accelerated its outreach tremendously. While social distancing norms forced physical casinos and other gambling hubs to stay shut, online gambling operations continued to thrive. And it’s safe to assume that the demand is here to stay.
While brick-and-mortar casinos are facing the heat due to the pandemic, online gambling is thriving. However, since the industry isn’t as well regulated in most parts of the world, its future remains uncertain. While a few nations, including Latvia and Austria, have limited their online resources, most other nations continue to formulate new laws.
Online Gambling Laws in Latvia
While online gambling continues to thrive in the USA, UK, Italy, Spain, Belarus, India, and the Philippines, Latvia declared outright war against the sport. As iGaming gained momentum during the pandemic, a leading number of operators were left searching for trained professionals. Thus, creating umpteen job opportunities for Latvian citizens.
The government, however, directed banks to flag payments to and from unauthorized gambling websites starting December 2020 and the information is currently under process by the State Revenue Service.
According to the official figures, over 38% of Latvia’s online gambling industry is unregulated, which is a huge cause for concern and the government is finally stepping up its game to reign in the illegals. For starters, amendments are being made to the Electronic Communication Law, the Latvian Administrative Violations Code, Law on Gambling and Lotteries, and Law on Payments Services and Electronic Money, and the changes are set to go live starting 2021.
The Rise of Online Gambling
With people forced to remain indoors, the demand for domestic entertainment exploded during the first half of 2020. iGaming emerged as the unlikely messiah as punters were hungry in the absence of land-based casinos and gambling establishments.
If the official figures are anything to go by, the demand for iGaming increased by 15% in Latvia since March 2020 and online poker rooms and video slots are leading the charts. While domestic websites are rare to come by, Latvians adapted off-shore websites that offer the best the world has to offer.
The Road Ahead
Although the Latvian iGaming industry has exploded in the last couple of decades, it still has miles to go before being recognized as a stalwart. For starters, the government can be overbearing at times, and the gambling ban during the pandemic is proof of that.
Despite the limited operational capacity, the Latvian gambling industry generated close to €129.2 million in revenue in nine months this year, which is still a 45.5% decline compared to the same duration in 2019. This number includes online casinos, land-based casinos, and bookmakers in Latvia.
The Latvian government decided to place restrictions on all forms of gambling, including electronic variants in March and although the ban was lifted in June, the damage was already done.
However, the slowdown isn’t entirely the government’s fault. As land-based casinos posted losses during the pandemic, online casinos continued to generate similar traffic volumes as the previous years. Hence, curbing the growth rate.