Taxes on Online Gambling in Armenia Increased Fivefold
New Tax Policy for iGaming Companies
The Armenian Parliament has approved amendments to the “State Duty” law, increasing taxes for iGaming companies by 400%. The annual state duty has risen from $2.03 million to $10.1 million. This decision aims to strengthen control over gambling activities and boost state budget revenues.
Deputy Finance Minister Karen Tamazyan noted that the tax rates had remained unchanged for over ten years, and these adjustments were long overdue. The amendments align the law with the Tax Code and will help the government generate more income from the growing sector.
Key Changes
- Increase in Annual Duty: from $253,000 to $1.2 million per company.
- Total Tax Revenue: expected to rise to $50 million annually.
- Betting Volume for 2024: projected to reach $18 billion.
- Sector Profitability: ranging from 5% to 20%.
Reasons for Tax Increase
Karen Tamazyan emphasized that the turnover of online gambling in Armenia has been growing rapidly. In 2014, it amounted to 44 billion drams (€102.5 million), and by 2016, it had reached 108 billion drams (€251.5 million). The eight largest companies will now pay around 4 billion drams (€9.3 million) in taxes annually.
Additionally, there is ongoing discussion about introducing an extra 10% turnover tax. This proposal, initiated by MP Hayk Sargsyan, has gained support from the National Assembly’s Economic Affairs Committee.
Expected Market Impact
- Increased Budget Revenue: additional funds will support social programs and infrastructure development.
- Stricter Gambling Regulation: new measures aim to curb the uncontrolled growth of the sector.
- Potential Strategy Shifts by Operators: companies may adjust their business models to adapt to new tax conditions.
The tax hike is also driven by the need to limit the rapid expansion of online gambling and enhance oversight of the sector. Lawmakers hope these new measures will strike a balance between economic interests and social responsibility.