Croatia has been offering legal gambling for many years now, even prior to gaining their independence from Yugoslavia back in 1991. Back in the 1960’s, they started regulating gambling although back then this was limited to betting on sports.
Later, after they regained their independence, they started expanding the gambling market in Croatia, with various forms of other gambling emerging, including casinos with live poker rooms, all under the direction of the state run Hrvatska Lutrija.
The land based gambling operations that exist in Croatia continue to be fairly tightly regulated, and live poker is limited to being offered only in one of their casinos, of which there are a total of 15, with 10 of them offering live poker, and a total of 24 poker tables being located in the country. (2)
So this doesn’t provide a whole lot of opportunity for Croatians to play poker, and even if all the poker tables are full at any one time, with 10 players at each one, that’s only a total of 240 players out of a total of 4.2 million people, so that adds up to a very small number indeed.
Croatians are quite fond of playing poker though so fortunately these days it’s perfectly legal for them to play online all they want, at any of the various online poker sites out there that serve players from around the world. Croatians are known for their presence on these online sites in spite of their relatively small population compared to a lot of other countries.
So online is where the real action takes place as far as Croatian real money poker goes, and the government is seeking to capitalize on this by looking to put together a regulatory framework as several other European countries have done in recent years.
Regulated Online Poker in Croatia
Croatia is a member of the European Union and is therefore subject to the influence and approval of the European Commission, who take a particularly active role in approving or disapproving the various ways which member countries offer gambling within their borders.
There are several countries who have run afoul of the European Commission and either are facing legal action in the courts or are expected to, for not complying with the spirit of the European Union in allowing free competition across firms within the EU.
In Croatia’s situation, they made the rather wise step of taking their plans on regulating poker in their country to the EU first, seeking their approval first before looking to implement it.
By most counts, they did receive approval, although an EU official was quoted as saying that the approval wasn’t quite official yet, however it appears to be official enough that the Croatian government is looking to proceed with the legislation, which is set to take effect sometime in 2015. (3)
What’s particularly noteworthy about all of this is that with some countries who look to regulate online gambling, online poker is secondary to other forms of gambling, where in Croatia it is at the forefront, and the expectation and goal is that they will have regulated online poker in Croatia in the near future.
The Design of Croatian Poker Regulation
What we need to keep in mind first and foremost here is that Croatia does not have any restrictions on players playing at non Croatian sites, and therefore from the perspective of players, no changes are needed and there’s no reason to welcome any changes either, given that things are as good as they possibly could be right now.
In a sense, regulated poker tends to come with both a carrot and a stick, and it could be argued that Croatian online poker really has neither. The stick usually comes first, in this case saying that you can’t play on these other sites, and then the carrot comes in which says well here’s some sites you can play at, but we still have the stick to try to make you confine your play to these sites.
Even in cases where there are no restrictions on online play, once regulations come into force, they usually bring some sort of stick to the party. So the government may make it illegal to gamble at non licensed online gambling sites.
Although that’s not a law that’s really enforceable at the player level, they can use this law to look to get internet service providers to block access to these unlicensed sites, which at least can slow things down a bit, even though this hasn’t been shown to be a very effective tool overall, and nowhere near as effective as governments would like to see.
So there’s really none of this going on as far as the proposed Croatian regulations go, s we’ll have to see how popular regulated poker actually becomes in Croatia once this is tried, or even if they can attract some of the major players in the online poker industry.
This is really where the success or failure of online regulation is made or lost, as if they can attract a big player like Poker Stars for instance, then they can be assured that all of their residents that wish to play at Poker Stars will be confined to regulated poker, since the licensed poker sites need to agree to confine players in the particular country, like Croatia, to regulated and taxed play only.
There has been some criticism that the tax rate proposed by Croatia’s legislation is too high, and that in itself may serve to scare away some or even all of the big players in the business. (4) The tax rate is being set at 5% of gross revenues, which doesn’t seem particularly high, yet it is being seen with some criticism, perhaps due to the smaller size of the Croatian market where the total revenue is smaller and therefore the tolerance for extra taxation would be less perhaps.
Players would also be required to pay tax to the government based upon their winnings, which is a double whammy for players as they not only have to pay this tax but likely have the poker room’s tax passed down to them as well.
There will be no way to escape this extra tax, which will range from 10-30% depending on the amounts, as poker rooms are required to withhold it, and this will involve all sorts of problems where gross winnings may be taxed without accounting for net profits properly.
We’ll have to see how this all pans out but it does not appear at this time that the Croatian regulations are set up to succeed very well at all and in spite of their having access to the main poker sites through this scheme, and not being ring fenced in, which would be a fatal blow here actually, Croatian players may still choose to ignore the licensed sites and just play on at the unregulated poker sites as they do now.
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