Growth in Luxembourg’s exclusive gaming market

Garance Limouzy September 26, 2024

The gaming market in Luxembourg operates within a tightly regulated framework, dominated by state monopolies and governed by a strict licensing process. Unlike many other European nations that have embraced open markets for online gambling, Luxembourg maintains firm control over its gambling sector, ensuring state involvement at almost every level. However, the industry is an important source of revenue for the country and the state.

State monopoly and regulations

The key player in Luxembourg’s gaming market is the National Lottery (Loterie Nationale), which holds a monopoly over most forms of gambling. Online gambling, while permitted, is restricted to state-run lotteries and sports betting. There is currently no licensing process for private operators in online gambling, giving the Loterie Nationale exclusive rights to offer online lotto and sports betting games.

Only one casino operates in the country: Casino 2000 in Mondorf-les-Bains. This establishment operates under a local license that tightly controls the types of games permitted, such as roulette, blackjack, baccarat, and slot machines. The casino’s operations have greatly contributed to state revenue. In 2023, Casino 2000 generated an impressive €24.2 million in fiscal revenue, up from €20.1 million in 2022 and €22.4 million in 2019, prior to the impact of Covid.

Luxembourg’s tight control contrasts with neighboring countries like France and Germany, which have more liberalised markets. Both nations have opened their online gambling industries to private operators, leading to market expansion. In comparison, Luxembourg’s state-driven model ensures more control but results in lower market diversity and growth opportunities for private players.

Online gambling market growth

Despite the restrictive framework, the online gambling market is expected to grow at an annual rate of 5 percent forecasted through 2029, according to Statista. This increase is largely driven by the growing popularity of online sports betting and gaming. User penetration in the online gambling market is estimated to hit 18 percent in 2024, with around 147,600 users expected by 2029.

Success of the National Lottery

The National Lottery has achieved remarkable success. In 2023, it recorded unprecedented results, with gross gaming revenue reaching €76.8 million, a 21 percent increase compared to 2022. New products like EuroDreams and the deployment of Video Lottery Terminals (VLTs) have contributed to this growth. VLTs alone generated €22.2 million, becoming the most popular gaming product offered by the National Lottery.

“We are proud to announce a record result for the National Lottery, surpassing all our expectations and setting a new benchmark for the years to come. This success is the result of the hard work and dedication of our teams, continuous innovation, and the trust that our players and partners have placed in us,” declared Léon Losch (pictured above), Director of the National Lottery.

The lottery’s strategy of combining a strong physical retail network with its digital offerings has allowed it to maintain growth even as more customers move online. In 2023, it paid out €16.2 million in commissions to retailers, further anchoring its importance in the local economy.