The governance of Olympic Entertainment Group (OEG), Eastern Europe’s largest omni-channel gambling operator, has confirmed that it will reduce its active Lithuanian portfolio by closing down nine betting shops and two casino arcades.
The decision follows on from the OEG performance review of its ‘Baltija’ (Baltic) subsidiary, in which governance underlined that inbound tax hikes on Lithuanian retail verticals had made the properties untenable.
In previous statements, OEG governance had warned the Lithuanian policy advisors that it would be forced to terminate its ‘unprofitable units’ should the government approve new gambling measures increasing retail taxes.
Amending provisions of its ‘Law on Lottery and Gambling’, Lithuania’s government will increase revenue taxes on bingo, arcade and betting to 18% (former 15%) with all online gambling activities set to be fixed to a standard 13% revenue tax.
Of further concern to Lithuanian incumbents, the government may move to establish ‘tax base increases’ attached to operating Category A and B gambling machines, which will enforce a monthly licensing fee per machine unit operated.
Saulius Petravičius, OEG MD for Lithuania, said: “Initiatives to aggressively change the tax environment not only create uncertainty, but have also forced us to rethink and change our business model.
“We will move the activity from the closed facilities to other operating units, such as betting shops, casinos or the remote gambling platform. This is how we respond to changing market conditions so that we can ensure the sustainability of our business through legal action.”