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A new government takes charge of implementing much-needed reforms to North Macedonia’s Gambling Act. Regulatory proceedings will have to accommodate the complexities of North Macedonia’s societal and ethnic make-up and its relationship with Balkan neighbours.
Examining the political dynamics and fault lines of a young North Macedonia reshaping its gambling regime, Ivan Kurochkin, Partner and Head of the Eastern Europe Desk at 4H Agency, provides a low-down on Europe’s most complex regulatory jurisdiction.
In May, North Macedonia witnessed the landslide victory of the ‘Nationalist Allies’ (VMRO-DPMNE) led by Gordana Siljanovska-Davkov, who became the Balkan nation’s sixth President and first female leader since independence from the former Yugoslav Republic in 1991.
Having been in opposition since 2017, the right-wing bloc led by Gordana secured an overwhelming majority at Skopje’s Kuvendi (General Assembly). The bloc has pledged to implement a ‘nationalist mandate’ to “eradicate corruption and end economic woes,” helping North Macedonia meet its regulatory criteria for accession to the EU, in which the nation has seen little progress since being granted ‘candidate status’ in 2005.
Proposed amendments to the Gambling Act were initially approved by the General Assembly in February. However, former President Stevo Pendarovski declined to sign the decree for their implementation, requesting additional revisions from the relevant departments.
The new nationalist government will take up the mandate to reorganise North Macedonia’s gambling laws, where opinions are deeply divided on issues such as authorisations for land-based venues, fee adjustments, and the control and supervision of online gambling activities.
Industry reforms are highlighted as a polarising issue, as the gambling sector is North Macedonia’s largest private sector employer.
Summer of Unrest
This summer, the gambling industry in North Macedonia has once again faced the potential of new restrictive measures. In July 2024, representatives of the Albanian minority, the Vlen political alliance, initiated a parliamentary process to discuss amendments to the current Law on Games of Chance and Amusement Games (the “Gambling Law”).
These amendments aim to limit the issuance of gambling licences and close more than half of all land-based gambling establishments in the country.
Unfortunately, this is not new for the North Macedonian gambling industry. The market’s complex regulatory structure, ongoing conflicts among authorities, polarised public perception, and other characteristics have made the gambling industry’s position unstable and unpredictable.
Market Overview
As of summer 2024, gambling in North Macedonia is regulated. Moreover, the regulation is detailed, which positively distinguishes the country compared to its stricter neighbours. Since 2019, North Macedonia has experienced a significant increase in gambling participation, partly due to Kosovo’s ban on all forms of gambling. The gambling market has been established in the country since 2011, following the implementation of the Gambling Law.
In 2021, the gambling industry contributed 4.58% to the country’s GDP. In comparison, the arts and entertainment sector contributed only 0.85%, while sports and recreation accounted for 0.39%. In 2022, the government earned nearly €88m from the industry, according to data provided by the Ministry of Finance. In 2018, this figure was €61m. The gambling sector’s contribution to the Macedonian state has grown by roughly 45% in five years.
However, the market lacks significant international players, with the exception of Austria’s Novomatic. The sector is primarily local, with land-based operators being privately owned and dispersed. Nonetheless, gambling remains highly popular among the population, with more than 1,000 land-based establishments, mostly slot halls and sports betting outlets, operating throughout the country.
Gambling as stands in North Macedonia
As mentioned earlier, North Macedonia regulates its gambling market well, led by the Ministry of Finance. The following verticals are legal and licensed: land-based casinos, land-based sports betting, land-based slot halls, online gambling, and B2B suppliers.
According to the Gambling Law, licences for the above-mentioned verticals, except for lotteries, are not limited in number and can be issued to any operator that meets the requirements. Lotteries are fully monopolised, and online gambling is reserved (not officially, but in practice) for the National Video Lottery, a state-controlled monopoly, founded as a joint venture with Casinos Austria in 2013. No private online gambling licences have ever been issued or made available in North Macedonia.
The licensing fees and terms for different types of gambling operations vary. Land-based casinos have a licence fee of €600,000 with a 20% monthly tax on gross gaming revenue (GGR) and a six-year term. Sports betting licences cost €105,000 with the same 20% GGR tax but are valid for three years. Slot machine operations require a licence fee of €78,750, also with a 20% GGR tax, and a six-year term. Online gambling licences are available for €50,000 with a minimum capital requirement of €40,000, a 0.5% tax on revenue, and a four-year term. Finally, B2B suppliers must pay a licence fee of €25,000, valid for four years.
As can be understood from the terms of obtaining a licence, they are more than accessible according to the letter of the law. Indeed, casinos, slot halls, and sports betting are very popular in North Macedonia, and the number of relevant land-based establishments is impressive. It is difficult to determine the exact number of licences issued for certain verticals, but based on information from the Ministry of Finance’s website, these are: 29 licences for slot halls, 9 licences for casinos, and 7 licences for sports betting outlets.
Entrenched camps…
The trajectory of North Macedonia’s gambling industry reflects a nation deeply divided on the issue, with ongoing political and social tensions shaping its future.
The 2016 campaign against gambling, sparked by the proposed construction of a casino in Mala Rečica, marked the beginning of a broader movement that eventually gained national traction under the Lëvizja Anti-Bixhoz banner.
Supported by Albanian minority groups, who also influence policy in neighbouring Albania and Kosovo (where gambling is mostly prohibited), the movement highlighted the cultural and political complexities that continue to impact the industry.
Despite these pressures, attempts to overhaul the Gambling Law have faced significant challenges. The 2022 proposal to completely shut down the gambling sector was dismissed by the government, and while other new amendments from February 2024 garnered more support, they ultimately failed to pass, leaving the industry in a state of uncertainty. The recent initiative by the Albanian minority coalition to revisit the Gambling Law in July 2024 underscores the ongoing debate, but as of now, no substantial changes have been made.
Outlook of ‘Cautious Optimism’
North Macedonia finds itself at a critical juncture. The industry’s future is clouded by internal political conflicts, an outdated regulatory framework, and the threat of following in the footsteps of neighbouring countries with a rather bleak history of gambling development. The absence of robust responsible gambling measures, weak anti-money laundering (AML) oversight, poorly regulated advertising known for causing civil protests and frustration, and the underdeveloped online sector further complicate the path forward.
However, there is reason for cautious optimism. The gambling industry is deeply rooted in North Macedonia, with established regulations and a degree of governmental support that suggests potential for future growth. The fact that the industry remains regulated and licensed, despite numerous attempts to curtail it, indicates that there is still room for development. If North Macedonia can navigate its internal divisions and modernise its regulatory approach, the gambling industry could yet emerge as a more stable and progressive sector in the years to come.
