Montenegro’s Ministry of Finance is spearheading a comprehensive overhaul of its gambling laws, marking the first significant reform in two decades. The proposed legislation aims to create a safe, regulated gambling environment while addressing public health concerns, financial crime, and fair market competition. Despite its forward-looking objectives, the draft has sparked controversy within Montenegro’s gambling sector over provisions such as restricted payment methods, a 15% tax on winnings, and strict advertising limits. This article explores the key aspects of the reform, stakeholder reactions, and its potential implications for the gambling industry and Montenegro’s economic growth.

A Vision for Responsible and Regulated Gambling

Objective of the Reform: The Ministry of Finance seeks to establish a legal framework that ensures:

Safe and responsible gambling environments.
Protection against financial crime.
Mitigation of public health and social issues linked to gambling.
Inclusive Consultation Process:

Public consultations began on October 21 and were extended until November 25 due to high interest.
Stakeholder feedback from authorities, businesses, and communities will be integrated into the final draft to create balanced regulations.

Key Provisions of the Draft Law

Protection of Vulnerable Populations:

The law includes provisions to restrict advertising, regulate the proximity of betting facilities to schools, and mandate player identification for both physical and online gambling platforms.
These measures aim to shield minors and young people from exposure to gambling.
Supervision and Fair Competition:** The Ministry aims to enhance regulatory oversight to enforce compliance and foster a competitive but fair marketplace for gambling operators.

Challenges and Controversies: Industry Concerns

Payment Method Restrictions:

The draft proposes limiting online gambling deposits to payment cards or in-person transactions at retail locations.
Excluded options such as e-banking and mobile banking are widely used in EU markets and align with EU payment directives.
Stakeholders warn that these limitations may drive players toward unregulated platforms, undermining market integrity and tax revenue.
Customer Tax Policy:** A proposed 15% tax on customer winnings has been criticized as unworkable.

Operators argue this tax could reduce player activity and lead to a decline in the number of active operators.
Instead of increasing government revenue, this policy risks achieving the opposite effect by shrinking the regulated gambling market.
Advertising Restrictions:

Advertising will be limited to sports-related websites and specific public venues.
Critics contend this approach could stifle business growth and conflict with Montenegro’s obligations as an EU candidate country, where advertising restrictions have been eased to support industry growth.

Leadership Insights: A Historic Step Forward

Jovana Nišavić, State Secretary for Finance, emphasized the importance of this reform:
“Thus, after two decades, Montenegro will have a new legal solution in the field of games of chance, which will include the key pillars, namely the protection of minors and young people, through provisions concerning the limitation of advertising, the distance of betting facilities from schools, and the identification of players both at bookmakers and online betting.”

Her comments underscore the Ministry’s commitment to creating a modern, secure, and accountable gambling framework that aligns with international standards.

Potential Economic Impacts

Market Integrity Risks:

By excluding widely used payment options like e-banking, the draft could inadvertently push players to unregulated platforms, reducing oversight and tax compliance.
Tax Policy Drawbacks:

The 15% tax on customer winnings may discourage gambling activity, leading to lower revenues for both operators and the government.
Operators warn this approach contradicts the stated objective of fostering sustainable growth in the gambling industry.
Stifling Innovation and Reach:

Proposed restrictions on advertising limit operators’ ability to reach broader audiences, potentially hindering business opportunities in a competitive market.

EU Alignment: A Path to Balancing Regulation and Growth

As an EU candidate country, Montenegro must ensure its laws are consistent with EU practices. Stakeholders argue that adopting more balanced regulations, such as allowing broader advertising and payment options, could support the industry’s growth while maintaining safeguards.

By aligning with EU trends, Montenegro could encourage a vibrant, regulated gambling industry that generates tax revenue and contributes to sustainable economic development.