Croatia’s Gambling Bill Approved by European Commission

When we talk about the countries that may belong in the grey market, we’ve mentioned Balkan countries as a specific group where online gambling stays mostly under the radar. Croatia is now set to leave that group, as a new gambling bill has been approved by the European Commission and should be in force in 2015.

After due diligence and voting in the Parliament, the new law should become relevant at the mid-point of next year. Once that happens, online operators wanting to offer their services in Croatia will have to apply for a license to do so. Those who do decide to take this step will likely have to deal with taxation that may just be too high to justify the investment.

The license itself will cost HKR 3 million, which amounts to around $490,000. And after the initial fee, licensees would be required to pay the same amount annually. In addition, any applying company will have to provide a security deposit in the amount of $490,000, which will serve as a guarantee for stability of the company and its financial well-being.

The Ministry of Finance will impose a 5% tax on gross revenue of the operators, adding to that a players’ tax that will be calculated on a sliding scale and could amount to 30% on winnings over HRK 500,000. The base tax on winnings between HRK 750 and 10,000 will be 10%. It will be the operators’ duty to ensure that the proper tax amounts are withheld.

The only good news for players is that there will not be a ring-fenced market like those in Spain in France, so Croatian players will still be able to enjoy the games against rest of world players, at least in those rooms that decide to go ahead and procure a license.

Feasibility Issues

Croatia is a small country with a populations of around 4.3 million. A recent member of the European Union, the country is making its moves towards the ‘west,’ but it still has a rather long way to go to get there.

When all these things are taken into account, Croatia may simply be too small of a market to warrant such big commitments from bigger online operators. Smaller ones probably cannot afford it. Once the new laws kick in, we could easily see a number of online operators currently offering games exit the market and wait for better times.

There aren’t that many professional online grinders in Croatia so the impact shouldn’t be too big in that regard, but it certainly is bad news even for recreational players who may no longer have a chance to participate in the games on their favorite platforms.