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Montenegro’s New Gambling Framework: A Step Towards Responsible Growth

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In August 2024, Montenegro’s government took a significant step towards modernising the country’s gambling industry by adopting the Fiscal Strategy for 2024-2027. This ambitious plan, aimed at ensuring macroeconomic stability and responsible governance, includes substantial changes to the gambling framework that could reshape the sector’s future.

The highlight of these changes is the upcoming Law on Gambling, which is expected to introduce a more systematic and sustainable framework for gambling operations in Montenegro. While the draft of the new law has not yet been made public, the Fiscal Strategy outlines several key areas of reform that the law will address.

One of the main objectives of the new law is the reform of the concession system for organising gambling activities. The new regulations will significantly amend the requirements for acquiring and revoking these concessions, aiming to create a more strict and accountable process. This move is expected to ensure that operators meet higher standards of compliance.

Another critical aspect of the law will be the strengthening of the competencies of the Gambling Administration and the Gambling Inspection Department. By providing these bodies with clearer and more effective powers, the government aims to improve the regulation and oversight of gambling activities, reducing the potential for operating in the grey area.

The new law will also emphasise safer gambling practices, with a strong focus on protecting minors. This includes an introduction of rules on the advertising of gambling activities and a review of the regulations concerning the minimum distance between gambling establishments and educational institutions. Additionally, the law is expected to introduce a system for allocating public revenues from the gambling sector to fund initiatives aimed at mitigating the negative social impacts of gambling.

Besides the Law on Gambling, the Fiscal Strategy also proposes amendments to the Law on Personal Income Tax. These amendments, which have already been put into procedure, will introduce a 15% tax on gambling earnings, calculated as the total winnings after deducting the amount invested. This tax should be calculated and withheld by the gambling operator and remitted to tax authorities by the next business day.

Both the new Law on Gambling and the amendments to the Law on Personal Income Tax are expected to be enacted by the end of 2024. These changes are part of Montenegro’s ongoing efforts to enhance the integrity and boost public revenues in the gambling sector by an estimated several million euros annually. As the details of these legislative changes unfold, it will be crucial for operators and investors to stay informed and prepared to adapt to the new regulatory landscape in Montenegro.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Ivan Nonkovic, Partner, Sava Draca, Senior Associate, and Filip Vukovic, Associate, Karanovic & Partners