BUSINESS

Latvia sees tax hike; Israeli company struggling without gambling and porn

TAGs: Latvia

latvia-tax-israel-strugglingLatvian authorities have decided to raise the tax on certain parts of the gambling industry as the economic crisis continues to hit the country hard.

Insiders told Gaming Zion that the proposals include a 30% tax increase on slots and video poker machines and that it will come in to force later this year. It won’t be the best news for an industry that is currently on a dramatic slide in the country. Revenues fell from €259.6m in 2007 to €122m in 2010 and the number of slot machines also decreased from 17,000 two years ago to just 8,000 in 2010.

The parliament believes the amount of tax, which will increase from €200 to €285 for each machine, won’t damage the entire gambling industry in the country.

The country’s largest operator, Olympic Entertainment Group, see the move as a chance to consolidate the market and are alive to the fact that many of the smaller operators will be blown out of the water by the proposals.

The CEO of Olympic, Madis Jääger, commented, “we can definitely say that because of the proposed tax increase, the Latvian casino industry can expect to lose a few of the smaller and less profitable casinos.’ The market’s total volume is likely to stay the same but with a smaller number of gambling venues.”

An Israeli credit card processing company is today ruing the decision to not stay buddies with online gambling and pornography.

Globes are reporting that figures released by Israel Credit Cards-Cal Ltd show that there revenues fell by 20% over the past year and revenue from online clearing fell by 72% over the same period.

Last year saw the police begin a crackdown on ISPs offering online gambling sites, something that hit the firm harder than most if you excuse the pun.

“We mainly devoted 2010 to dealing with the crisis,” said ICC CEO Israel David.

It also doesn’t help that the company offers the most expensive rate of any credit card in the country and as a result saw net profit fall from 2009 figures.

It will be interesting to see if the economy starts to really deteriorate whether they come crawling back to gambling all over again.

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