Gambling addiction drives Armenia to propose 10% turnover tax

February 6, 2025

Gambling addiction drives Armenia to propose 10% turnover tax

Armenia is considering imposing a 10 percent turnover tax on its gambling sector, in addition to existing taxes and duties, as part of a broader effort to regulate the industry. The proposal, presented by Hayk Sargsyan, a member of the ruling Civil Contract faction, was given a positive reception in its first reading by the National Assembly Committee on Economic Affairs on 5 February.

Sargsyan’s proposal comes in response to the rapid and alarming growth of gambling in Armenia. Despite previous legislative efforts to tighten the sector’s regulation, gambling activities have continued to rise. According to Sargsyan, the previous measures had proven insufficient in curbing the industry’s expansion. He argues that additional tax measures are needed to bring the sector under control, especially given the increasing number of online and virtual gambling platforms.

The gambling sector in Armenia has experienced significant growth over the past 13 years, with traditional gambling, online gaming, lotteries, and betting operations all contributing to the increase.

Market sees 17 fold increase

The total amount of bets placed by Armenians in 2024 reached over $18 billion (€17.34 million), a staggering 17-fold increase from 2018, with the majority of these wagers placed through online platforms. This sharp rise has raised concerns not only about the economic impact but also about the potential societal consequences, including rising gambling addiction rates.

However, the proposal to raise taxes has sparked a debate. Babken Tunyan, Deputy Chairman of the Economic Affairs Committee, has raised concerns about the potential negative effects of stricter tax measures.

He warned that higher taxes could drive gambling companies out of Armenia, either relocating to other countries or continuing operations in Armenia’s virtual space, where regulations are harder to enforce. Tunyan also emphasised that increasing taxes does not always lead to higher government revenue, making the effectiveness of such measures uncertain.

Gambling addiction a concern, warns PM

Armenian Prime Minister Nikol Pashinyan also addressed the issue during a recent press conference. He stated that while the government is keen to impose restrictions on gambling, it cannot completely ban the practice, as it is widespread globally. Pashinyan acknowledged the challenges of regulating online gambling, stating, “If people don’t place bets in Armenia, they will do so in another country. These are online bets. And if we restrict the internet, I am sure there will be many comments accusing us of limiting people’s freedoms.”

The rise of gambling addiction in Armenia has become an increasing concern. Studies show that approximately 2-3 percent of individuals involved in gambling in the country develop an addiction. The proliferation of online gambling platforms has exacerbated the issue, with the number of players more than doubling between 2018 and 2020.

The effects of gambling addiction are severe, often leading to financial ruin, relationship breakdowns, and mental health problems. Families have reported devastating consequences, with individuals losing large sums of money and becoming socially isolated.

In response to these issues, the Armenian government has implemented several legislative measures aimed at regulating the gambling industry and reducing the risk of addiction.