State revenues from taxes and licenses: structure and mechanics of fiscal revenues in Croatia

The Croatian gambling industry operates within a clear fiscal framework of the EU and national legislation. The state receives money not from one source, but from a set of taxes and fees that are imposed on different parts of the price chain - from gross gaming income (GGR) and licenses to corporate profits and municipal payments. Below is a clear map of these flows, without "overcomplication" with legal details.

1) Gross gaming income (GGR) tax

What is taxable: GGR = bets minus winnings paid (no operating expenses).

Who pays: licensed online operators (slots, bets, live casino, poker) and offline objects (casinos, slot halls, bingo, betting points).

How it works in practice:

For online and offline, legal rates and/or scales apply, which may vary by vertical (slots/tables/rates/bingo/lottery).
In some segments, differentiated approaches operate (for example, different modes for casino games and bets), as well as minimum thresholds and settlement bases.
The tax is paid periodically (usually monthly) according to the data for the reporting period with subsequent reconciliation.

💡 Idea: the state takes a share precisely from the "gaming added value," and not from the full turnover of rates - this reduces the volatility of revenues and better reflects the real economy of the product.

2) Licenses and regular regulatory fees

One-time and annual payments for the right to conduct business:

Online Licenses (Casino/Betting/Poker): Issuance Fee + Annual License Maintenance Fee.
Offline objects (casinos, halls, bingo): permission for the object + annual duty/fee by site/type of equipment.
Administrative fees for license changes, adding verticals/domains, certifying integrations, etc.

💡 These payments form a stable income "cushion" less dependent on GGR seasonality.

3) State lottery and earmarks

Hrvatska Lutrija transfers to the budget and trust funds a part of the income from lottery products (number games, Bingo, scratches).

Part of the proceeds is directed to sports, culture, social programs (shares and priorities are fixed by normative and annual plans).

The lottery model provides the state with a predictable flow that complements the GGR tax of commercial operators.

4) Corporate taxes and related charges

In addition to "game" taxes, operators pay:

Income tax (from the tax base after expenses, separate from GGR tax).
Contributions to salaries, employee income tax, other social payments.
VAT on services and purchases, where applicable (game operations are traditionally withdrawn or have a special regime, but related services - marketing, IT outsourcing, equipment - form a VAT flow).

5) Municipal and object payments

Local budgets receive:

Object fees and administrative fees (permits, approvals, trade fees).
Property/land taxes, rent payments of state facilities, tourist fees (indirectly due to gambling traffic).

6) Fiscal control, audit and penalties

The system includes:

Online reporting and fiscal reports by vertical.
Certification of RNG and live providers, KYC/AML checklists.
Fines and penalties for violations (advertising, AML, responsible practices, technical standards).
Fines are not "planned" income, but they perform a disciplinary role and replenish the budget.

7) How money reaches the budget: the payment cycle

1. Reporting period (usually a month): formation of GGR along verticals.

2. Calculation of taxes/fees at the established rates/formulas.

3. Payment to the Treasury and submission of reports to the regulator/tax administration.

4. Reconciliations/audits: scheduled and random checks, confirmation of the correctness of payments.

5. Distribution: part of payments goes to the general budget, part - to trust funds (sports, culture, social programs).

8) Example of "end-to-end" calculation (simplified model)

Imagine a conditional online operator for a month:

Bets (handle): €50 million
Payouts of winnings: €46 million
GGR: €4m

Further applied:

GGR tax (rate dependent on vertical; suppose a mixed effective rate would yield notional € X).
Annual license (decomposed "monthly" for planning).
Corporate tax - on profit after operating expenses and after paying the "game" tax.
Contributions to payroll, VAT on related purchases, other fees.

💡 In reality, the exact numbers are determined by verticals, rates and preferential/target regimes. This example only shows the order of priority: first GGR tax, then "regular" corporate taxes and contributions.

9) What affects the volume of revenues

Seasonality and tourism. Summer and holidays reinforce offline GGR and indirect fees.

Portfolio structure. The share of slots, live, rates - each vertical has its own fiscal profile.

Regulatory changes. Advertising limits, KYC/AML standards, technology requirements can change revenue dynamics and the taxable base.

Payment logistics. The work of cards/wallets in EUR, the share of auto-approved conclusions, the level of chargeback - all this affects the stability of reporting and the tax calendar.

10) How the industry "returns" to society in excess of taxes

Responsible play (RG). Operators' investments in limits, self-locks, staff training and verification reduce social costs.

Employment and competencies. Casino, tech support, risk analytics, DevOps/BI, live studios - create jobs and local supply chains.

Infrastructure and tourism. Events, tournaments, premium segment, F&B - multipliers for hotels and services.

11) Recommendations to editors and analysts

Show the split: GGR tax ≠ corporate tax; lottery deductions ≠ commercial online.

Make diagrams by verticals and channels (offline/online), emphasize seasonality.

Separately label trust funds: sports, culture, social programs.

Croatian state gambling revenues are a combination of GGR current, licenses and annual fees, lottery deductions, corporate taxes and municipal payments. This multi-channel design makes receipts more stable, and a rigid reporting loop (KYC/AML, certification, audit) - predictable. For the market, this means clear rules of the game; for the budget - a stable contribution of the industry while observing the principles of responsible play and transparency.