The proposed Personal Income Tax Law, which includes taxing all gambling winnings over 300 euros at a rate of 15%, has sparked a strong reaction—not only within the gambling industry but also among experts. While the draft Law on Gambling is formally presented as a way to increase budget revenues, its consequences could be far from positive. In short, even if the state authorities had the capacity to implement the proposed measures, the outcome would likely be entirely counterproductive.
This assertion was soon confirmed by the state itself, as the regulatory agency EKIP confirmed that it would not block the operations of foreign gambling operators. This directly validated the concerns of the legitimate industry: excessive regulation would lead to the gradual shutdown of the legal gambling sector, while fueling the growth of the black market and associated organized crime.
This is a brief overview of the potential consequences of taxing gambling winnings.
Impractical and unfeasible idea
The idea of taxing gambling winnings may seem sustainable in theory, but the proposed regulations encompass all forms of gambling—from sports betting and online casinos to live casinos and slot machines.
The problem? It is technically and administratively impossible to calculate winnings in real-time, especially in segments like live casinos—unless the intention is to shut down the legal industry entirely, forcing all employees to exclusively handle administrative tasks related to tax obligations.
Economic and legal consequences—job losses and international legal disputes
The gambling industry in Montenegro employs about 3,000 people, contributes tens of millions of euros to the national budget annually, and operates under strict regulations and the highest European standards, many of which were voluntarily imposed long before they became legal requirements.
Introducing such an impractical tax would directly lead to international legal disputes involving the state of Montenegro, which, at least in principle, aims to align with EU standards.
Unfortunate examples from the region
The proposed tax is almost certain to result in the practical shutdown of the legal market. A very instructive example is Albania, where similar, even more restrictive measures led to a boom in the black market, draining the budget instead of filling it. Montenegro risks making the same mistake.
Ignoring historical civil initiatives
Representatives of legal gambling operators in Montenegro, led by the Montenegro Bet association, have been trying for months to point out the disastrous consequences of this situation through institutional channels. Last year, a civil petition against this measure gathered 21,792 signatures in just three days. The signatures were submitted to the Montenegrin Parliament, but the lawmakers have yet to respond.
Counterproductive budget-filling policy
It is understandable that national governments worldwide are looking for ways to increase budget revenues, but proposed policies must be based on practicality and fairness. Taxing gambling winnings sounds like a simple solution, but it will almost certainly be a counterproductive move that will incur disproportionately more costs than benefits.
The only sustainable solution would be to withdraw the unworkable Tax Law on Gambling Winnings and continue comprehensive dialogue with gambling operators and the public to regulate the gambling sector in Montenegro according to the highest European and U.S. standards.
