The Lotteries and Gambling Supervisory Authority, the first real set of gambling legislation, was founded by government authorities in 1998. To regulate the gambling sector, the government established the Control Department that year. From casino operators, this organization receives tax payments. The government’s Licensing and Financial Analysis Division is in charge of issuing licenses to the nation’s casino operators. For many years, the same set of regulations was in effect. Latvia introduced its gambling and lotteries law in 2005. As a result, there is now a new structure that allows both offline and internet gaming businesses to operate lawfully in the nation. As a result, the Law on Gaming and Lotteries outlined the fundamental legal framework for gambling in Latvia. The Law on Lottery and Gambling Fees and Tax and the Law on Personal Income Tax are two independent laws that govern gaming fees and taxes.
Lottery tax
The following are subject to the lottery tax:
- money received from the selling of lottery and quick game tickets
- revenue from the selling of tickets for quick and local lotteries
- money from ticket sales for certain local lotteries
Items covered by the tax
The items include:
- mechanical and video game machines, as well as the locations of each
- roulette: every gaming table linked to the roulettes’ spinning mechanism
- a game of cards and dice at each table
- Bingo
- telephone-based game of chance
- betting
- gambling that is conducted through a communications network
Tax amounts
Lottery tax rates for regular and instant lotteries are equal to 10% of ticket sales revenue. The types of gambling have an impact on the different tax rates. By the 15th day of the next month, the lottery and gaming tax for the previous month must be calculated and paid. Every month, including the month in which the gaming device or gaming table is installed or disassembled, the tax for every gaming location, every gaming machine, and every gaming table in every place of direct organization of gambling must be paid at a rate equal to one-tenth of the annual tax rate. The following is how the gaming tax must be paid: 25% of the budget goes to the local government in the area where gambling is organized, and 75% goes to the state’s basic budget. The lottery tax must be deposited into the state’s general fund for use in state lotteries. It will be deposited into the local government’s budget within the jurisdiction where the lottery is being held for local lotteries. Within 15 days after the conclusion of the reporting quarter, lottery and gambling organizers must submit reports to the State Revenue Service detailing the relevant tax they anticipate collecting.
Earnings
The lottery and gaming earnings must be included in a natural person’s other taxable income. However, earnings from lotteries and other gambling activities are exempt from taxes if the total amount received during the tax year is less than €3,000.
Filing report
The organizer must inform the Authority by the first day of the month of the number of gaming machines and gaming tables that will be run at each licensed gambling establishment during the relevant month. Without altering the overall number of gaming machines and the total number of gaming tables in each particular gambling venue as notified on the first day of each month, the gambling organizer may relocate a gaming table or gaming machine to another gambling venue within a calendar month. The operator of interactive lotteries, as well as the operator of betting or wagering that accepts bets through electronic communication services, must submit a statement to the State Revenue Service and the Lotteries and Gambling Supervision Inspection that includes the following information:
- the number of tickets sold, and the total amount of prizes awarded
- a credit institution’s quarterly document detailing player payment interactions
