The 4H view: Everything you need to know about Armenia

EGR has partnered with 4H Agency to bring its readers a series of long-form articles on the requirements and key facts and figures for a host of emerging markets throughout the world. Tapping into 4H’s talent pool of expert, the articles will outline the regulatory framework and entry requirements for interested parties, as well as an insider’s view on how the market could shape up in the coming years.

Here, the series starts with Armenia, with commentary from 4H’s head of CIS desk and senior consultant Dmitry Hotsyn.

Market overview

Gambling in Armenia has historically been regulated by a relatively simple and underdeveloped legal framework. This framework encompassed various forms of gambling, including lotteries, casinos, slots and sports betting.

However, the regulations provided minimal oversight, which resulted in a lack of transparency and consistency within the industry. The Armenian gambling market operated under conditions that allowed significant freedom for operators but also left room for irregularities and potential issues related to consumer protection.

Recognising the need for a more robust regulatory environment, the Armenian government announced in 2022 its intention to overhaul the existing gambling regulations. This marked the beginning of a significant shift in the country’s approach to regulating industry. After a period of thorough development and discussion, the new legislation introduced a range of reforms designed to strengthen the regulatory framework and bring Armenia’s gambling industry in line with international standards.

The new Gambling Act, which came into force in July 2024, brought several key changes to the industry. These reforms represent a major shift in Armenia’s approach to gambling regulation, demonstrating a clear commitment to creating a well-regulated and transparent market.

The Armenian gambling market has a lot of potential. As of 2023, Armenia’s population stood at approximately 2.7 million people, with a GDP of $24.2bn and a GDP per capita of $8,715. The country ranked 62nd on the Corruption Perceptions Index, with a score of 47, placing it between Jordan and Vanuatu. In terms of market potential, revenue in Armenia’s online gambling sector is projected to reach $25.4m in 2024, indicating significant growth opportunities in a now more regulated environment.

This regulatory overhaul is expected to have profound implications for the Armenian gambling market, attracting both domestic and international operators who are looking for a more stable and transparent environment in which to operate.

Regulations

Licence types

In Armenia, licences are granted separately for each regulated vertical. Accordingly, there are four types of B2C licences:

Lottery licence

Sports betting licence

Casino and slots licence

Online gambling licence

Lotteries can be arranged as draw-based, non-draw-based, or a combination of both. Sports betting can be either totalizator-based (where the amount of winnings is determined by a coefficient based on the total amount of bets placed by players) or fixed-odds betting (where the amount of winnings is determined by a coefficient pre-set by the operator). Slots can be arranged separately in gaming halls or along with casino establishments. Online gambling definition allows to operate every vertical in a remote format.

There is no provision for a B2B licence in the Gambling Act and it is understood that Armenian regulations do not regulate licensing of B2B providers.

Licence requirements

A gambling licence may be issued to an entity which meets the following criteria:

Shareholders of the company applicant must not be bankrupt, must provide proof of the source of their funds, and must not have had their licence revoked for previous activities

Key persons must not have a criminal background, must not have been disqualified from holding significant positions in financial, commercial, economic, or legal spheres, and must not be bankrupt or have outstanding obligations. They are also required to provide proof of the source of their funds and must not have served as key persons in a gambling company that had its licence revoked within the past three years as a disciplinary measure.

Key persons shall receive an operating certificate (granted for two years by the sub-regulator for separate fee which is yet due to be established)

For online gambling, betting and lottery company applicant must have a deposit in an Armenian bank amounting to twice the annual licence fee

Company applicant shall receive a certificate of conformity from the sub-regulator (confirmation of the certificates by the international laboratories under relevant ISO international standards).

Licence cost and term

Gambling licences in Armenia do not have a fixed term. They remain valid indefinitely unless voluntarily relinquished by an operator or revoked by the regulator.

The licence fee varies depending on the vertical and shall be paid both prior to the license issuance and further on an annual basis:

Lottery licence fee – AMD600m ($1.5m)

Sports betting licence fee – AMD600m ($1.5m)

Casinos and slots licence fee – depending on the location of the establishment:

Tsaghkadzor – AMD180m ($464,000)

Sevan – AMD150m ($386,100)

Jermuk – AMD100m ($257,400)

Meghri – AMD35m ($66,000)

Elsewhere – AMD5.5bn ($14.1m)

Thus, when obtaining a licence, the renewal fee is essentially an annual licence fee. Since the licence has no expiration date, it can be revoked only upon the occurrence of certain events (violation of the law, non-payment of the licence fee) – in other cases, the licence is indefinite.

Taxation

The primary tax in the field of gambling in Armenia is a tax on winnings.

A large win is defined as any single win exceeding AMD5m ($12,800), which is subject to a 5% income tax.

For smaller wins, the net winnings, calculated as the difference between total winnings and bets placed, are subject to a 10% income tax

Responsible gambling and AML

In Armenia, responsible gambling rules and regulation of monitoring itself is a novelty. Introduced in summer 2024, such mechanisms are still due to find their place and receive separate regulation from the authorities.

Responsible gambling rules

These are mandatory to be prepared by the operator. Such rules are not defined yet but most likely they will need to include the following:

Prohibition on participation for following players:

Persons who receive state support, who are registered in the social assessment system, who have been declared bankrupt or have unpaid (unforgiven) obligations to the state budget, and/or who are registered with the National Addiction Treatment Centre.

Persons under 21 years old for all verticals with exception of lottery; under 18 years old for lottery

Persons who limited or banned their participation in gambling and/or persons with gambling addiction.

Restrictions do not apply to non-citizens of the Republic of Armenia, except for the age-related restrictions outlined above.

Frequent changes of the IP address used to participate in gambling may be deemed risky and trigger restrictions. Criteria for being considered risky and the procedure for applying restrictions shall be defined.

AML requirements

There is general AML Law in Armenia, which considers operators and mandates them to the following:

Apply a risk-based approach in their business and with players

Implement an AML policy

Report to the regulator about suspicious transactions

Do not open, issue, or provide any service with relation to the anonymous or fictious accounts of players

Apply due diligence measures for players after their first transaction (which is equal to or exceeds four hundred times the minimum wage)

Apply monitoring for current and future players

Protect personal information

Marketing

In Armenia, the following restrictions apply to gambling advertising:

Advertising of offshore gambling is prohibited (offshore gambling, defined as gambling from foreign countries and under the domain other than .AM)

Advertising of gambling is allowed on websites of licensed operators, at licensed land-based establishments, hotels of four- and five-star rating, and at border points

Additionally, lottery advertising is permitted at point of sales.

Market specifics for entry

Gambling location restrictions should be considered by an interested operator. Online gambling websites must be located in the “AU” domain. Land-based establishments of casinos and slots can be held only at the following locations:

In the administrative boundaries of Tsaghkadzor community of Kotayk marz.

Within the administrative boundaries of Jermuk municipality of Vayots Dzor marz.

In the administrative boundaries of Sevan municipality of Gegharkunik marz.

Within the administrative boundaries of Meghri community of Syunik marz.

In the area of Yerevan “Zvartnots” airport.

In other places if approved by the government in case of an investment project of more than AMD40bn ($103m) made by the operator.

Betting and lotteries can be organised in each administrative centre of Armenian provinces and in each administrative district of Yerevan city additionally with the restriction of one betting/lottery establishment per location. There is also a limitation of the area of the establishment for betting or lottery, which is 200 sq m for each gaming hall.

Additionally, every operator is required to connect their gambling content and equipment to the monitoring centre after certification and before use, with the assistance of the sub-regulator. This centre serves as an online platform to monitor various aspects of gambling activities, including tokens, winnings, and real-time events.

The 4H view

The Armenian gambling market is in the middle of a dynamic period of development and regulation. While historically characterised by a loosely controlled environment, the country is moving towards a more structured and transparent framework, mirroring international best practices. This shift, driven by the new Gambling Act and ongoing regulatory efforts, seeks to create a safer and more responsible environment for both players and operators. For example, it includes provisions allowing the targeting of foreign players and the acceptance of deposits and payouts not only in the national currency but also in foreign currencies. These provisions may be interpreted as permitting offshore operations under an Armenian licence.

Armenia’s gambling sector has only just begun liberal reform. Information on the number of licensed operators remains unavailable, except for major players like Digitain, BetConstruct, and Adjarabet. In the first quarter of 2023, these companies collectively paid AMD4.9bn ($12m) in taxes to the state budget, a figure that rose to AMD8.7bn ($23m) in the first quarter of 2024.

The new Gambling Act’s provisions closely resemble Georgia’s gambling regulations, such as the introduction of a private sub-regulator overseeing certification and monitoring, the inclusion of offshore provisions, and the dependency of licensing costs on territorial location. Following Georgia’s example which is one of the most successful gambling markets in the post-Soviet space is a positive indicator for Armenia.

Though despite the new regulations, the market still faces hurdles. Local operators dominate the market, making it challenging for new entrants. Advertising restrictions, a preference for land-based establishments, and high licensing costs further complicate the landscape. However, the potential for growth in online gambling remains significant, especially considering Armenia’s internet penetration and young population.

Dmitry Hotsyn is the head of the CIS desk and a senior consultant at 4H Agency. With a wealth of experience under his belt, Dmitry provides expert guidance on international expansion, mergers and acquisitions and organisational structuring for gambling enterprises.

Before joining 4H Agency, he served as a co-leader of the gambling practice at Ukraine’s largest law firm and worked in an IT-focused investment fund, where he assisted in investment and operational support.