Latvia Merges Gambling Regulator with Tax Authority After Raising Taxes

Latvia Integrates Gambling Regulator into State Revenue Service – Tax and Supervisory Powers Combined Under One Authority

Key Takeaways

• Latvia integrated its Lottery and Gambling Supervision Inspectorate into the State Revenue Service on 1 April 2026.
• The reform was approved by Cabinet in October 2025 as part of the 2026 budget legislation.
• Gambling tax increases took effect on 1 January 2026, raising rates across interactive gambling, betting, and bingo.
• The Ministry of Finance projects an additional 9.2 million euros in annual revenue from the combined measures.
• The Association of Licensed Gambling Operators in Latvia warned of potential venue closures following the tax increase.

Regulatory Restructure Took Effect on 1 April 2026

Latvia has implemented a structural change to its gambling oversight framework by integrating the Lottery and Gambling Supervision Inspectorate, known as IAUI, into the State Revenue Service, or SRS. The reform came into force on 1 April 2026.

The decision was approved by the Latvian Cabinet in October 2025. The necessary legislative changes were embedded within the country’s 2026 state budget package. By placing the gambling regulator under the authority of the tax administration, the government has combined supervisory and fiscal responsibilities within a single institution.

According to the Ministry of Finance, the objective of the reorganisation is to simplify administrative processes and reduce bureaucratic fragmentation. The ministry stated that integrating gambling supervision into a unified tax and supervisory administration system is intended to streamline state resources and strengthen oversight of the gambling and lottery sector.

Supervision and Tax Oversight Now Combined

Under the new structure, the former IAUI’s supervision and control functions are divided between two newly established units within the SRS Non-Financial Sector Supervision Department. As part of the merger, the State Revenue Service absorbed 21 staff positions from the previous regulator.

The Ministry of Finance emphasised that bringing tax collection and industry supervision under one authority is designed to enhance the state’s ability to identify both financial and legal risks. This includes closer alignment between fiscal monitoring and compliance oversight.

For operators, this means that regulatory supervision and tax administration are now handled by the same institution. Licensing control, compliance monitoring, and financial reporting requirements will fall within the broader framework of the State Revenue Service.

Tax Increases Introduced Earlier in 2026

The regulatory restructure follows tax changes that entered into force on 1 January 2026. These measures increased tax rates across several segments of the gambling industry.

The tax on interactive gambling services rose from 12 percent to 15 percent of gross gaming revenue. Betting tax rates increased from 15 percent to 18 percent. Bingo taxes were raised from 10 percent to 12 percent.

In addition to percentage based taxes, fixed annual charges applied to gaming machines and table games were also adjusted upwards. These changes were part of the same broader fiscal policy framework that included the later institutional reform.

The Ministry of Finance projects that the combined tax measures will generate an additional 9.2 million euros in revenue. Of that amount, approximately 175,000 euros are expected to be directed to local governments.

Industry Response to the Tax Measures

The Association of Licensed Gambling Operators in Latvia, referred to as LLAB, publicly criticised the tax increase. The association warned that the higher rates could result in a decline in overall tax revenue rather than growth.

LLAB also stated that the increased fiscal burden could lead to the closure of more than 20 gambling venues nationwide. The comments focused specifically on the impact of the tax adjustments rather than the structural merger of the regulator.

No additional details were provided regarding which types of venues could be affected or over what timeframe closures might occur.

Implications for the Gambling Sector

The reform creates a unified system in which the same authority is responsible for collecting gambling related taxes and supervising compliance with gambling laws. According to the Ministry of Finance, this integration is intended to strengthen supervisory capacity and improve the identification of financial and legal risks within the sector.

The restructuring also reduces the number of separate public bodies involved in gambling oversight. Instead of operating as an independent inspectorate, gambling supervision now forms part of the broader tax administration framework.

At the same time, the sector is adjusting to higher tax rates that affect interactive gambling services, betting, bingo, and land based gaming equipment. The projected increase in state revenue reflects the government’s expectation that the higher rates and revised fee structure will generate additional fiscal income in 2026.

Our Assessment

Latvia has implemented two significant changes to its gambling framework in 2026: higher tax rates effective from 1 January and the integration of the national gambling regulator into the State Revenue Service from 1 April. The government states that the combined approach aims to streamline administration, reduce fragmentation, and strengthen oversight by unifying tax and supervisory functions. At the same time, industry representatives have raised concerns about the financial impact of the increased tax burden and the potential closure of gambling venues. Together, these measures mark a structural and fiscal shift in how Latvia regulates and taxes its gambling market.