The government of Montenegro has proposed?a 15 percent tax on gambling winnings as part of its fiscal strategy. This tax would generate an additional five million euros annually, helping to offset the loss of income from reduced pension insurance contributions. However, the proposal has faced significant criticism from gambling operators who warn of potential negative impacts.
This is not the first attempt by Montenegro to introduce a tax on gambling winnings. The National Assembly passed a similar law in December 2014, but it was repealed due to non-implementation by the Ministry of Finance and gambling operators. The lack of secondary legislation meant the tax was never collected, leading to its eventual withdrawal. Now, nine years later, the new government is once again proposing this measure, hoping to implement it successfully this time.
Industry reactions
The gambling operators’ group within the Chamber of Commerce has expressed serious concerns about the proposed tax. They argue that its introduction could lead to a 30 percent drop in revenue for legal operators, negatively affecting state revenue from variable concession fees, which currently generate around 22 million euros annually and have been on the rise.
According to the operators, increasing the tax burden might push players towards the black market and foreign online operators who are not subject to this tax.
Operators have also expressed concerns about the technical challenges of implementing the proposed tax. They argued that calculating and collecting the tax could be difficult due to the varying treatment of stakes and winnings throughout a game, which complicates accurate tax assessment.
EU countries practices
There is no uniform practice for taxing games of chance across EU countries, as member states have the autonomy to regulate this area according to their own rules. Some countries impose higher tax rates on operators, while others tax the winnings.
In Croatia, a tax on winnings is applied to lottery and betting games, but there is no tax on winnings from casinos and slot clubs. The tax rates vary based on the amount of the winnings, ranging from 10 percent to 30.
In Bosnia and Herzegovina, the tax regulations for winnings differ between the Federation and the Republic of Srpska. The Federation imposes a 10 percent tax on winnings that exceed a certain threshold. In contrast, the Republic of Srpska does not levy any tax on winnings, which gives operators in that region a competitive advantage.
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