The shadow gambling market in Latvia continues to grow, and the government is losing tens of millions of euros in taxes. The main threat now comes from crypto casinos and betting sites using gaming items, popular among youth and video game users.
According to the analytical company H2 Gambling Capital (H2GC), the gross income of the illegal gambling market in Latvia is expected to reach €62 million by 2025. This primarily concerns online casinos and betting sites operating without a Latvian license, as reported by LETA, citing Lvportals.lv.
Experts predict that due to the activities of such operators, the Latvian budget may lose around €90 million in taxes over the next five years.
Since April 1, control over the gambling industry has been transferred to the State Revenue Service (SRS) — the Lottery and Gambling Supervision Inspection has been incorporated into it. The agency stated that combating illegal online casinos will be one of its priorities.
The SRS notes that the volume of budget losses is growing along with the tax burden on the legal market. The tax rate on gambling income increased from 10% to 15% in 2026, thus raising the amount of uncollected taxes from the shadow segment.
This issue is not only relevant for Latvia. According to H2GC, the popularity of crypto casinos and so-called skin betting — betting using virtual items from video games — is rising in many countries. For example, players can wager game "skins," which are then sold for real money.
In 2025, websites with such bets accounted for nearly a quarter of all traffic in the illegal gambling market.
According to H2GC, more than 1,000 illegal gambling sites are currently accessible to residents of Latvia. About 900 of them operate in English, over 250 in Russian, and only 24 in Latvian.
An additional problem is posed by so-called mirror sites. After being blocked, they quickly reappear under new addresses, making it significantly more difficult to track the actual volume of the illegal market.
The growth of the shadow segment indicates that it is becoming increasingly challenging for the government to control online gambling in the era of cryptocurrencies and international platforms.
