Decrease in Revenue Generated by Gambling Sector in Latvia
In the first half of 2025, Latvia's gaming market saw a significant shift towards online platforms, with online gambling accounting for 56.9 percent of the total market, according to the Lottery and Gambling Supervision Inspection. This shift comes at the expense of the traditional offline gaming sector, which experienced a decline in revenue.
The Inspection, which has been responsible for implementing state policy in the field of gambling and lotteries since 1998, attributes the decline in the offline gaming sector to a variety of factors. Signe Birne, the head of the Inspection, emphasized that the reduction in the number of gaming halls and machines, as well as the growing consumer preference for online and free-to-play mobile games supported by advertising revenue, are key contributors to the decline.
Reports indicate that video game revenue is increasingly shifting towards online and mobile platforms that monetize through ads, with advertising revenue in gaming projected to rise significantly. Moreover, while entertainment spending overall remains significant offline, the competition from diverse digital content and economic pressures are constraining growth, likely impacting offline gaming sales in markets like Latvia.
In the first half of 2025, a total of 141.092 million euros was generated by Latvian gaming companies. Online gambling made a substantial contribution to this total, with casino games contributing 84.9 percent of the revenue. Slot machines accounted for 38.9 percent of the revenue from online gambling, while card games accounted for 13.1 percent.
In contrast, the traditional offline segment saw a decline in revenue, with slot machines bringing in 54.907 million euros, a decrease of 12.1 percent. By the end of June 2025, there were 168 gaming halls operating in Latvia, with a total of 4284 slot machines, a decrease of 17 halls and 460 machines.
The gaming industry contributed 29.775 million euros to the state and municipal budgets in the form of taxes and fees, a 2 percent increase from the same period last year. The Inspection made 180 decisions related to the blocking of similar resources in the first half of 2025.
As of June 2025, there are two casinos and one bingo hall operating in Latvia, with a total of 78 betting shops. In total, 19 companies are engaged in organizing gambling activities, with 6 being land-based gaming halls and casinos, 1 being a bingo hall, 3 being betting shops for tote betting, and 17 being involved in interactive gambling games.
In conclusion, the decline in the offline gaming sector in Latvia during the first half of 2025 can be attributed to a mixture of factors, including the shift to digital and mobile gaming platforms with advertising-supported models, reducing offline sales, economic uncertainty and rising costs leading consumers to limit discretionary spending, including offline games, and a broader competitive entertainment ecosystem with more choices online, causing offline formats to lose market share.
What factors might be causing the decline in the traditional offline gaming sector in Latvia, as reported in the first half of 2025? The shift towards online and free-to-play mobile games, influenced by advertising revenue, could be a major contributor, along with growing competition from diverse digital content in the finance sector, especially in casino-and-gambling activities.
