The worsening regulatory climate in Lithuania has forced one major gambling industry operator to reduce its presence in the Baltic State.
Olympic Entertainment Group (OEG) which has the distinction of being the biggest multi-channel gambling incumbent in Eastern Europe, has revealed that it is set to cut back on its operations in Lithuania. In the short term, this will involve shutting nine of its retail betting shops and closing a pair of casino arcades. The decision comes after OEG held a review into the performance of its Baltic company, Baltija, which concluded that proposed tax rises for the retail gambling sector in the country would affect the future profitability of these properties.
And OEG has been open in recent months about its position on the issues. Statements issued by the company earlier this year indicated that if changes were made to gambling tax policy, it would have to consider closing down some of its operations in the country.
The changes to Lithuanian’s tax policy are in the form of amendments to the Law on Lottery and Gambling. The government has proposed raising the taxes on revenue for retail betting, bingo and arcade operations from 15% to 18%. At the same time, online gambling operators will have to pay a 13% revenue tax rate to the Lithuanian state coffers.
Other proposals have also caused concern among Lithuanian operators. The government has suggested introducing new taxes, which will require gambling companies to pay a monthly fee for each gambling machine that they operate.
Speaking about the company’s decision, the Managing Director for Lithuania at OEG, Saulius Petravicius, said that changes in the tax environment cause uncertainty and force operators to act:
“We will move the activity from the closed facilities to other operating units, such as betting shops, casinos or the remote gambling platform. This is how we respond to changing market conditions so that we can ensure the sustainability of our business through legal action.”