Industry Reports

Latvia Lacks Effective Policies to Combat Problem Gambling

Latvia is one of the most gambling-friendly European countries with nearly 9,000 slot machines across the country and more than 40 gambling halls only in its capital, Riga. While the market seems to be booming, there are no official statistics to show the prevalence of problem gambling within the population. A recent report demonstrated an even more alarming trend in the Baltic state – self-exclusion, a method that is widely used across the world to help people with gambling addictions, is currently not working.

According to an investigation of De Facto, a show at the state-owned public television LTV, casinos and other gaming facilities still allow individuals who opted out from gambling. In 2011, a self-exclusion programme was introduced in the country and so far, 1,260 people have participated. They can voluntarily opt out from being allowed to gamble at land-based facilities or online. As it turns out, however, they can freely visit casinos and other places with slot machines, for example, as there are no ID checks upon entry. Moreover, there are no fines or other penalties for gambling operators and slot parlour owners who allow self-excluded gamblers.

Meanwhile, Latvia has never conducted a research to find out the real number of people who suffer from some type of gambling addiction. According to estimates based on other European studies, around 1 per cent of the country’s population can be described as problem gamblers. This translates to approximately 13,000 adults, although the true figures can be much bigger in reality. The Health Ministry is currently carrying out a research that should reveal the gambling habits of Latvians by the end of the year.

Self-exclusion is a powerful and effective tool in many countries and it is used to help compulsive gamblers visit gambling facilities less often and spend less money on games of chance. An important aspect of this policy is the fact that the individual needs to complete the self-exclusion form voluntarily. It bans the person from entering land-based casinos or gamble online for a limited period of time – three or six months, for instance. It turns out that the only place where the policy actually works is the Internet where casino players are not anonymous. Online gamblers are required to provide valid government-issued IDs and other documents to verify their identity and age. So, self-excluded gamblers are, in fact, very easy to spot and prevent from placing bets or playing casino games.

Booming Market

Latvia is nowhere near the largest gambling and sports betting markets in Europe where the annual gross gaming revenue (GGR) is in the eight-figure range. In 2015, Italy reported GGR of around €18 billion, followed by the United Kingdom with €17.9 billion in GGR. Latvia, on the other hand, is a much smaller state with a population of roughly 2 million people. According to official data, there are around 9,000 slot machines in the country and on average, each of them has an annual turnover of €22,000.

Some experts point out the 2016/2017 fiscal year was very successful for Latvian casinos which reported 10 per cent increase in revenues and around 8.5 per cent rise in turnover. In 2017, the gambling industry, i.e. slot machines, casino gaming, totalizator, bingo and online gambling, had a total turnover of €261 million while the profit was €64 million. While these figures seem dwarfed when compared to other European markets such as above-mentioned Italy and the UK, they are striking in comparison with other sectors within Latvia.

For example, the leading telecommunications and Internet service provider in the country, Lattelecom, had a turnover of €196 million last year, while its profit was €41 million. The Latvian Railways or “Latvijas dzelzceļš” had a turnover of €180 million and a profit of €23 million. In 2017, slot machines accounted for most of the gambling industry’s turnover – out of the €243 million in total, €196 million was generated by the popular electronic gaming machines. The revenue from table games at casinos was €17 million, while interactive gambling generated €23 million during the same period.