Armenia has initiated a significant shift in its approach to gambling regulation, implementing a substantial increase in taxation for operators throughout the sector. On March 6, 2025, the Armenian parliament approved legislation that will double gambling levies starting April 1, 2025. This decisive move aims to generate an additional 13 billion drams (approximately $33 million) annually while establishing a more structured and transparent gambling environment that better aligns with regulatory frameworks seen in other jurisdictions.
Taxation Structure and Financial Implications
The newly approved legislation introduces a dramatically increased tax burden for all gambling operators in Armenia. Under the revised framework, sports betting companies will see their obligations rise from 50 million drams ($127,000) to 100 million drams ($253,000) for every 50 billion drams ($127 million) in bets processed. Online casino operators face an even steeper increase, with their tax burden jumping from 175 million drams ($444,000) to 350 million drams ($887,000) for each 100 billion drams ($253 million) wagered on their platforms.
These increased state duties come in addition to existing financial obligations that remain unchanged. Gambling companies will continue to pay the annual licensing fee of 600 million drams ($1.5 million) plus standard corporate profit tax as required by Armenian law. The legislation passed with 58 votes in favor, 2 against, and 17 abstentions, demonstrating substantial though not unanimous support for the measure.
Notably, the legislation contains a powerful incentive for establishing proper regulatory infrastructure. Authorities have explicitly warned that if a dedicated gambling oversight body is not operational by 2028, the tax rates could increase threefold, fourfold, or even fivefold from their current levels. This escalation clause aims to accelerate the development of a comprehensive monitoring system for the industry.
History and Industry Growth
Armenia’s gambling landscape has undergone a profound transformation since the country’s Soviet era when casinos and gaming establishments were entirely prohibited. During that period, gambling activities occurred only clandestinely. The contrast with today’s environment is stark – approximately 10 casinos and 100 gaming parlors now operate in Yerevan’s outskirts alone, with one major establishment even providing business cards for psychologists who can assist problem gamblers.
The sector has experienced explosive growth in recent years. According to parliamentary discussions, the gambling industry’s turnover has skyrocketed from 14 billion drams to an astonishing 6.3 trillion drams. During this same period, government revenue from gambling taxes and duties increased from 1 billion drams to 33 billion drams, though lawmakers argue this represents a disproportionately small share of the industry’s actual economic activity.
The total amount of bets placed by Armenians reached over $18 billion in 2024 alone, marking a 17-fold increase from 2018 levels. The majority of this wagering activity now occurs through online platforms, which have proliferated with technological advancements and increased internet penetration across the country.
Regulatory Challenges and Oversight Mechanisms
The current regulatory framework relies heavily on the State Revenue Committee of Armenia, which supervises gambling operations through on-site inspections and desk audits. This body is also responsible for ensuring compliance with anti-money laundering laws through documentary control and examination of submitted reports. However, the existing system has significant limitations. The State Revenue Committee currently depends on voluntary information provided by operators to calculate taxes, leading lawmakers to suspect potential tax evasion. This concern has driven the push for a more robust oversight mechanism that can independently verify financial transactions within the industry.
In January 2025, the government approved additional gambling legislation scheduled to take effect later this year. This comprehensive law will prohibit Armenian citizens from participating in gambling organized outside the country and restrict advertising of foreign gambling services. To ensure compliance, authorities will gain powers to block illegal gambling websites. The law also mandates that operators must be physically based in Armenia, including their servers, software, hardware, and gaming platforms.
Social Implications and Impact on the Economy
Beyond regulatory and fiscal concerns, the social impact of widespread gambling has significantly influenced the government’s reform agenda. Psychology experts have noted that the number of problem gamblers in Armenia has increased tenfold over the past five years, attributing this rise to various factors including stressful personal situations and disappointed economic expectations.
This social dimension is particularly troubling given Armenia’s broader economic challenges. With official unemployment at 17.3% (though independent estimates suggest higher figures), over one-third of Armenia’s population of approximately 3 million people lives in poverty. The average monthly wage stands at only about 113,163 drams ($273.53), creating financial vulnerability that may increase susceptibility to gambling addiction.
MP Hayk Sargsyan, the author of the new tax legislation, revealed that Armenian online casinos received over $2 billion in investments in 2024 alone. He argued that if these funds had been redirected into the broader economy, Armenia’s GDP could have increased by 10-15%, while state revenues might have grown by 7.34%.
Government Perspectives and Industry Concerns
Prime Minister Nikol Pashinyan has acknowledged the complexity of regulating gambling in the digital age, noting that gambling exists worldwide and cannot be entirely prohibited, particularly given the accessibility of online platforms operating across international borders. Pashinyan stated:
It is a form of activity that exists in all countries and cannot be banned. If we restrict the internet, I am sure there will be many comments accusing us of limiting people’s freedom and taking a dictatorial step.
The government has emphasized protecting vulnerable populations from gambling-related harm. Current regulations already prohibit individuals under 21 years of age and citizens receiving certain forms of government financial assistance from participating in gambling activities. The new regulatory framework aims to strengthen enforcement of these restrictions through a comprehensive monitoring system.
Industry representatives and some legislators have expressed concerns about potential unintended consequences of aggressive taxation. During committee discussions of an earlier version of the bill that proposed an additional 10% turnover tax, Deputy Chairman of the National Assembly’s Economic Affairs Committee Babken Tunyan warned that excessive taxation could drive gambling companies to relocate while continuing to serve Armenian customers through digital channels. He emphasized that gambling companies are legitimate business entities in Armenia and are protected by laws, and expressed concern that imposing strict tax measures could potentially drive these companies out of Armenia.
Implementation Challenges
The success of Armenia’s gambling reforms will largely depend on the effective implementation of the planned oversight body and complementary regulatory frameworks. If properly executed, these measures could establish Armenia as a model for balanced gambling regulation, generating substantial public revenue while mitigating harmful social impacts.
However, industry experts caution that sudden tax increases might harm the licensed gambling sector and inadvertently channel more activity toward unregulated overseas operators beyond Armenian jurisdiction. This highlights the delicate balance regulators must maintain between revenue generation and creating a viable regulated industry that can effectively compete with illicit alternatives.
The Civil Contract party legislators behind these reforms have been working to address gambling addiction through various legislative initiatives for many years. The current approach represents their most comprehensive effort to date, combining taxation, regulatory oversight, and social protections into a unified strategy for managing Armenia’s rapidly evolving gambling sector.
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