Gambling in Croatia: History, Legal Aspects, and Key Nuances

Experts of the Rosloto company will tell you why it is a good idea to launch an iGaming startup in Croatia and why this country attracts many participants from foreign markets.

A Brief Detour Into History

For most of the 20th century, the jurisdiction was part of the Socialist Federal Republic of Yugoslavia. Entertainment for money was banned throughout the East bloc, and Croatia was no exception.

The jurisdiction was the first in the territory of the SFRY to accept bets at public kiosks. The only market available was sports forecasting.

After the announcement of independence in 1991, the niche began to actively develop. Tourism became an indicator of growth. Casinos and locations with slot machines were opened in famous resorts and 5-star hotels. Their target audience was mostly foreigners.

In 2010, Croatia adopted the first law on interactive gambling.

Key provisions of the document:

• partial liquidation of the state monopoly represented by Hrvatska Lutrija;
• legalisation of bets in casinos and virtual bookmakers’ offices;
• access to the market for non-residents of the country (both private customers and B2B providers).

In 2014, the government voted for the law on games of chance.

It was agreed upon by the European Parliament because a year earlier (in 2013), Croatia officially joined the EU. All regulations (types of games, advertising issues, and administrative responsibility) were implemented in accordance with the requirements of the European Union.

Gambling Structure in Croatia

Here, all kinds of entertainment for money are considered legal:

Features of Casino Business Licensing

Let us consider the main provisions of the law on games of chance:

Separate Permit for Each Type of Service

Entrepreneurs can obtain a special certificate that will allow them to:

• organise gambling entertainment with instant winnings (slots and video poker);
• accept bets on sports events;
• install land-based slot machines.

The Gambling Department of the Croatian Ministry of Finance is responsible for the issuance of such permits. The regulator also monitors the fulfilment of obligations by licensees and the timely payment of taxes and fees. The authorities also participate in the resolution of disputes between business owners and players.

The gambling certificate is valid for 15 years.

Entrepreneurs are required to draw up a document for each type of activity. B2B companies (software vendors, as well as hosting and IT support providers) can work under a sublicence obtained from operators.

Manufacturers of land-based equipment (betting, shuffle, and slot machines) must also receive quality assurance from one of the laboratories accredited by the Ministry of Finance.

In addition, casino staff (for example, croupiers, supervisors, and cashiers) have to obtain work permits as well. To do this, they pass a state examination.

Clear Rules for Applicants

The main condition is to register a company in Croatia, get a legal address, and open 2 accounts in a local bank.

The first one will store a financial guarantee in the amount of $575.5 thousand, and the second one is going to be used for conducting the current operations of a digital casino owner or a bookmaker.

Applications are accepted electronically. The following documents need to be submitted:

• information about the brand (name, address, and the size of authorised capital);
• data on key persons (founders, investors, managers, and final beneficiaries);
• information about the software used (slots, table games, settlement methods, and affiliate programs);
• the firm’s three-year business plan, which includes such aspects as income, expenses, and the number of employees;
• proof that bankruptcy proceedings have not been instituted against the company.

The Ministry of Finance considers applications and makes a decision on public trading admission. Based on received and analysed documents, the regulator ranks enterprises and then issues licences to those who have the highest positions.

The number of permits that can be obtained to operate iGaming platforms is not limited.

The legislation provides:

• 20 licences for casino resorts;
• 20 certificates for sweepstakes organisers;
• 55 documents for owners of offline halls with slots.

One entrepreneur can manage several gambling locations and betting shops after receiving relevant permission.

All servers must be located within the country. Online wagering is only allowed on websites with a .hr domain address.

Affordable Gambling Advertising

The main condition is that promotion should not be aimed at minors. For this reason, the Ministry of Finance has prohibited broadcasts on radio and television shows and publications in printed materials if they are designed for children and teenagers.

The government does not restrict operators in the choice of affiliate services, bonus systems, and loyalty programs. In this regard, Croatia is one of the most democratic EU countries.

The maximum fine for breaking advertising regulations is $71.3 thousand.

Basic Safety Requirements

The provision of fair and secure gameplay is the main task of licensed entrepreneurs.

Non-compliance with confidential data storage standards or acceptance of bets from minors will result in huge fines — up to $72.2 thousand and the seizure of the business owner’s property.

It is important that operators keep in mind the following aspects:

1. Two-factor personal identification. To confirm registration on the website and each subsequent entrance to the platform, players indicate their nickname and password and undergo verification via biometrics. As an alternative, project owners use Bank ID technology. It ensures automatic data exchange between the casino server and the bank where customers have an account.
2. Addition of responsible gaming mechanisms. These are time counters, restrictions on limits and number of bets, self-exclusion registers, etc.
3. Checking transactions for money laundering. All operations over $2,145 thousand are subject to AML scanning.

Cost of a Permit, Taxes, and Fees

The state duty is $431.6 thousand. Entrepreneurs transfer this amount annually throughout the validity period of the licence.

The size of the financial warranty is $575.5 thousand. It must be stored in a special bank account for 15 years or until the permit is revoked.

Tax rates depend on the type of gambling:

• organisers of lottery draws and bookmakers transfer 5% of their GGR;
• online casino operators — 15%;
• owners of offline establishments — 25%.

Managers of land-based halls pay an additional state fee for each unit of equipment:

• certified slot machines — $1,427;
• card and roulette tables — $5,705;
• a wheel designed for more than 6 participants — $7,128.

Corporate income tax is paid in the amount of 18%. For operators with income less than $1,072.6 per financial year, a 10% rate is applied.

Croatia is one of the first in Europe to introduce a tax on winnings. Although all deductions come from players’ prizes, they are calculated by the owners of iGaming platforms. Their size depends on the won money — from 10% to 30% (for payouts over $7.3).

Advantages of Opening a Digital Casino in the Jurisdiction

The main reasons for investing in the local market are:

1. Organised licensing system. The Ministry of Finance established a clear procedure for obtaining a permit and created comfortable conditions for running and scaling a gambling business.
2. Stable political and economic environment. Croatia is a member of the EU and NATO, maintains friendly relations with Western territories, and has formed a close partnership with Asia. The state’s residents have high incomes, so they spend funds on iGaming platforms without regret.
3. Well-developed IT infrastructure. Modern data centres and IT hubs are located here, and the entire country is covered by a high-speed 5G network. It is no coincidence that the jurisdiction has attracted many live studios that provide video streaming 24/7. Besides, there is a strong labour market here with many qualified specialists.
4. The long validity period of a licence. The document is issued for 15 years. This allows operators to build a long-term financial strategy and plan their actions for several years ahead.
5. Loyal tax burden. The jurisdiction does not have such high levies as in other European countries. Thus, online casino owners pay only 15% of the GGR.

Secrets of Starting a Profitable iGaming Project in 2023

Let us consider the main nuances that investors should pay attention to:

Focus on Mobile Internet Traffic

Key facts about Croatia:

• The country's population is about 4.07 million people.
• 3.34 million residents (82%) have constant access to the Internet. 2.9 million (71.2%) of them are active users of social networks. The leadership is maintained by Facebook, YouTube, and Telegram. The companies are followed by Pinterest, Viber, Instagram, and other platforms.
• There are more than 5.25 million mobile devices in Croatia, which is more than its population. The smartphone penetration rate is 129%.
• About 65% is accounted for by mobile Internet traffic. Desktops bring only 33% and game consoles — 2%. The main source of the influx of customers is Google. It is followed by local information portals.

Launching a mobile casino is the best area for investment in 2023. Entrepreneurs will definitely receive good income by managing legal and promising iGaming startups.

Local Payment Solutions Priority

For making settlements, people use proprietary applications of the following popular banks:

• Privredna Banka (PBZ);
• Raiffeisenbank Austria Zagreb (RBA);
• Podravska Banka (POBA).

More than half of transactions are carried out using online acquiring and direct bank transfers. Only 11% of Croatians have e-wallets.

Owners of online casinos should definitely add local payment systems to their software. This will increase customer confidence, improve the company’s financial policy, and optimise operating costs thanks to the reduction of commissions.

Creation of Attractive Ads

Croatian society is patriarchal: here, the man is the undisputed head of the house. Therefore, using the image of a successful businessman, politician, or doctor who plays in a casino in his spare time is a popular marketing move. It is positively perceived by the audience and provides an influx of new solvent customers.

In the ad design, it is recommended to focus on the colours of the flag (red and white chequered and blue) and local charm. The black goat, for example, is a symbol of the Istra Peninsula.

The population has a quite favourable attitude towards this image, so the animal is often used in the design of gaming sites or video slots. Another in-demand symbol is the Dalmatian dog, which was bred in the country.

Many Game of Thrones scenes were filmed in resort towns. That is why it would be a good idea to use such pictures (for example, the old town of Dubrovnik) when creating games for real money.

The Main Things about Gambling in Croatia

This is a successful jurisdiction with a developed casino industry.

• The benefits of entering the local market are a stable political and economic environment, strong IT and labour sectors, and a loyal fiscal burden.
• All types of gambling are allowed in the jurisdiction: operation of resort casinos and offline halls with slots, work of bookmakers’ offices, and acceptance of bets on online platforms. The right to conduct lottery draws has been given to the Hrvatska Lutrija state monopolist.
• Licences are granted by the Ministry of Finance. The document is issued for 15 years after a tender. An application for participation in it can be submitted online.
• Each type of activity requires a separate permit. Companies must register a legal entity in the country, have an office, open 2 accounts in a local bank, and provide a financial guarantee in the amount of $575.5 thousand.
• In 2023, it will be beneficial to open mobile gambling platforms. The creation of a Telegram casino is going to be a promising investment area since a significant part of the traffic comes from this social network. The addition of local payment systems and organisation of attractive marketing campaigns can be considered a key to success.

A modern iGaming project can be bought from Rosloto. The studio offers ready-made turnkey platforms along with a catalogue of branded entertainment.

We also provide the following useful services:

• integration of various settlement methods;
• development of Bitcoin casinos;
• creation of unique HTML5 slots based on individual sketches;
• drafting business plans, and much more.

For all questions, please contact our managers.