The Croatian Ministry of Finance is working on a legal regulation that would force foreign online betting sites to legalise their business in Croatia or cease operations. This would include all international betting sites, which offer online gambling services to Croatian gaming enthusiasts, reports Jutarnji List on January 27, 2019.

For a country like Croatia, whose public finances are always in trouble, it sounds unbelievable that the government is not taxing an industry worth up to two billion kuna a year, which is the estimated value of the online betting business in Croatia. The problem of the non-taxing of online gambling providers is not just a consequence of the reluctance of tax authorities to deal with this issue. The control and blocking of web betting sites should also include other institutions, such as Carnet and the State Attorney's Office, and even the courts which are the only ones that can enforce the prohibition of business activities.

At the level of entrepreneurial freedom, what betting sites are doing is similar to tactics used by Amazon, Apple or Google on the European Union market, where they try to take advantage of under-regulation, risking enormous fines. Amazon, for example, recently paid 282 million euro in penalties for tax evasion in Luxembourg, following a European Commission's action against it.

Advocates of the current situation in the sports betting market believe that fees for betting and related winnings are already too high and unjust, so it is quite acceptable for some players to turn to online betting. In addition to the manipulative costs of five per cent of the amount paid, which legal betting agents must charge for all tickets, players pay a minimum of ten per cent tax on their payouts, which increases up to a maximum of 30 per cent of winnings of over 500,000 kuna.

The usual reason for the inclusion of internet service is that it breaks state monopoly in the market, but in the case of sports betting this is not true since the two largest legal betting chains in Croatian market, Super Sport and Hattrick-PSK, are privately-owned.

There is also another issue. While gamblers using the services of legal betting shops on the internet must register so that it can be determined whether they are over 18, underage users can access the betting services more easily with the providers who have not aligned themselves with the local regulations.

More news on the online betting industry in Croatia can be found in the Lifestyle section.

Translated from Jutarnji List (reported by Vedran Marjanović).

ZAGREB, January 25, 2019 - Finance Minister Zdravko Marić said on Friday the only reason for introducing the possibility of blocking websites was the unfair competition of foreign online betting sites which pay no taxes on their services.

Unlike domestic online betting sites, international ones pay neither a business fee nor profit tax given that they are not registered in Croatia, and players, i.e. citizens, do not pay taxes on their winnings, Marić said at a conference on the impact of the tax policy on innovation and development.

That's why, in the rules on the implementation of the General Tax Act, which is in public consultation, the Finance Ministry has proposed the possibility of blocking access to websites used for prohibited business operations and tax evasion.

"If someone has a certain business operation in Croatia, not paying any taxes and creating unfair competition, the Tax Administration can initiate blocking a certain IP address, Marić said.

Helena Schmidt of Deloitte, one of the organisers of the conference, said amending tax laws was not enough to change the economic situation and that young people would not stay in a country without prospects.

She said that in 2000 Ireland had one million less inhabitants than today and that it now had the youngest population in Europe. The net of a gross Irish salary of 2,000 euro is 1,700, she added.

More news on the internet issues in Croatia can be found in the Lifestyle section.

ZAGREB, January 28, 2018 - Betting and gambling business in Croatia earned 2.7 billion kuna in revenues in 2016, which was a record high in the last 16 years, and the Croatian lottery Hrvatska Lutrija was the top performer with 500 million kuna in revenues in 2016, according to figures released rather belatedly by the Financial Agency (FINA).