Countries across the region of Eastern Europe are opting for a policy of gambling expansion. Such a trend such not be a surprise. Countries in the region are in dire need of money, while their gaming industries are not saturated and ripe for development.

In most cases the expansion refers to Internet gambling. There is, however, one exemption: Republika Srpska, one of the entities that make up Bosnia and Herzegovina. In January 2011 the region launched its first land-based casino, doubling the total number of casinos in the country. Republika Srpska, in the same month, also granted the first Internet gaming licence to Williams, the land-based bookmaker and slot hall operator. Williams now offers sports betting and casino games over the Internet. Williams is also targeting players throughout the region, which the regulator does not forbid – we wonder whether this combination of a “white” and “grey” operation will prevail in the future? 

Montenegro has also expanded its gaming sector: the country now has seven land-based casinos, compared to five a few years ago. Montenegro is also preparing expansion into the Internet gaming space, with the law now in the parliament. The current draft of the law allows only existing land-based operators to apply for an Internet licence for the same type of game.
On 22 November 2011 Serbia adopted a new gaming law, which, amongst other changes, finally permits Internet gambling for all licensed operators. Based on the information from JAKTA, the Serbian Association of gaming organisers, authorized technicians and producers of gaming equipment, the law will be in force from 31 December 2011 and the operators will be given six months to apply the new rules. 
According to the same source, the Internet gaming provisions remained virtually unchanged compared to the May draft, meaning all interested operators will be able to get a licence provided they form a Serbian company with set capital requirements. The servers will have to be located in Serbia. The licence will be valid for ten years and the gaming tax has been set at an attractive 5% of GGY for non-betting games and 15% on betting. Minimum tax is set at €7.5k per month. The monthly licence fee is set at €2.5k.
We believe that Internet gaming in Serbia has great potential, based on the experience from Croatia. Croatia legalised Internet gaming in January 2010 and the first two operators launched a few months later in June 2010. In September 2010 they were joined by the national lottery that offers sports betting and lottery games over the Internet. Online gaming quickly became very successful, with nearly one-quarter of the total sports betting handle coming via the Internet in September 2011.  
When looking only at the operators that have both land-based and Internet betting, one-third of their handle comes from the Internet.
Eastern European regulators have taken a more realistic view when it comes to setting the main rate of Internet gambling tax by comparison with their Western European neighbours, Poland being a notable exception. It is a shame that they have negated this practical approach in relation to tax by imposing high barriers to entry, such as land-based gambling requirement and high additional levies. These barriers have certainly limited the interest in the developing Croatian Internet gambling market.