Earlier this month, the Croatia government released a presentation titled “Combatting addiction to games of chance and betting”, outlining the planned changes to the nation’s gambling laws and the reasons behind their proposals.

Prime minister Andrej Plenković has pledged he will tighten the nation’s laws on gambling in order to alleviate growing concerns over gambling addiction in Croatia.

The presentation cites data from the Faculty of Education and Rehabilitation, which suggests 72.9% of high school students have gambled at least once, with 12.9% meeting the criteria for high-risk gambling problems.

The planned changes focus heavily on tackling “aggressive” advertising, which the government believes is currently fueling problem gambling in Croatia.

Government proposals include a ban on advertising between 06:00 and 23:00 on the internet, radio and other channels, and prohibiting use of famous people to market gambling. Ads must not be displayed to those under the legal gambling age of 18.

Other changes would include the introduction of a self-exclusion scheme and the prohibition of self-service betting terminals (SSBTs) in public venues, such as restaurants and cafes.

However, the tax system for operators will be tweaked to the system below:

Licence fees will also be heavily increased for both online and land-based casinos, as well as brick-and-mortar betting shops;

Why is Croatia reforming its gambling laws?

Speaking to iGB, Marko Tomic, partner at local law firm Siketić & Tomić, explains these reforms will mark the first changes to the Croatian gambling laws in over a decade.

The proposals come as Croatian gambling is in good health, as ex-managing director of MaxBet Lazar Miucin points to Entain’s 2022 acquisition of local operator SuperSport as an example of international giants taking interest in the market.

So why are the regulatory changes happening now? Tomic explains the reasoning is twofold.

The first is to protect minors from underage betting, with Tomic revealing political pressure has been growing, pushing for stronger regulation of the gambling sector.

The second reason, in Tomic’s view, is a desire to protect legal companies in Croatia from the black market.

“The second leg is of course the illegal operators, and restricting them as much as possible in the market,” Tomic explains.

“[While], of course, protecting the tax revenues and the revenues of the regulated operators who are paying quite high fees for their licences here. This I think is the main focus.”

How could operators be impacted?

Both Tomic and Miucin predict the changes will come into force prior to the targeted 1 January 2026 date.

But while the true consequences for operators remain to be seen, Miucin anticipates the reforms could lead to consolidation as smaller operators look for a way to remain in the market.

“I’m expecting some M&A to happen because small companies, maybe they will not see any advantage of working alone,” Miucin continues. “There are one or two companies that are small for the market and are going to be extremely influenced by the law changes.”

However, Tomic disagrees, arguing the alterations to aspects such as tax rates aren’t enough to have operators reconsidering their presence in Croatia.

“I don’t think it would change anything, because operators here have invested a lot of money and resources,” Tomic says. “They are employing a lot of people, so of course it’s going to be a burden on them.

“I think the industry in Croatia is employing 7,500 people currently, so it is a significant number, but I don’t think it will impact them [to exit the market], since the market itself is growing each year.”

Protection from the black market

As Tomic explains, one of the government’s primary motivations for changes is the shared desire with operators to clamp down on the black market.

This is an objective for which an effective remedy has not yet been found in Croatia, with IP blocking failing to properly restrict illegal operators, despite efforts from the ministry of finance.

The government is switching its focus to financial companies, Tomic notes.

“The focus is going to be on the payment service providers. The tax authority will aim to basically prohibit any type of suspicious transaction, especially to these illegal providers in Croatia.

“Since the IP blockade was introduced, now currently there are over 900 websites that are blocked by the government order. But I think the main tool they are introducing is the control over the payments.”

While operators are facing licence fee increases of up to 50%, Miucin feels licensed companies will be more inclined to adhere to regulations and stay on the legal side of the Croatian gambling sector, under the new framework.

“It’s bad for everyone, but it’s OK if the rules are the same for everyone,” Miucin explains. “Let’s close down all the black markets.

“That’s the thing with regulation. ‘You want to charge me 20% extra tax? Not a problem. Let’s work together to block [black market operators]. Then I’m going to pay you 20% tax’.”

Could Croatian gambling law updates stunt growth?

The increased fees and restrictions on advertising will no doubt lead to increased expectations from operators concerning the regulator’s blocking of the black market.

The Croatian gambling sector has enjoyed solid growth in recent years, but the new law represents a significant milestone, which could mark a new era of enhanced protection for players, according to the government.

Croatia is prepared to join a number of European countries in tightening gambling laws, as Netherlands also faces increased tax rates, and the UK grapples with heightened protection measures.

But many stakeholders have argued in the past that tax hikes and tightened restrictions on advertising and player protection are causing black markets to thrive, as players seek out products with less friction and requirements.