Montenegro Gambling Tax Overhaul Sparks Legal and Industry Dispute
Montenegro’s finance ministry sparked industry outrage after it introduced a new tiered tax on gambling winnings at short notice.
LISTEN TO THIS ARTICLE:The Ministry of Finance enacted amendments to the Law on Personal Income Tax that took effect at the start of the year, instituting a tiered levy on gambling winnings. The changes were delivered to operators with roughly 24 hours’ notice, forcing rapid system updates ahead of the January implementation. The move has provoked immediate criticism from online operators and an industry association, which say the timetable and selective application are unfair and legally suspect.
Under the previous regime, any gambling prize above €300 faced a flat 15 percent withholding. The revised structure narrows the tax-free threshold to €50, applies a 10 percent rate to winnings from €50.01 to €1,500 and maintains a 15 percent rate for payouts above €1,500. The Ministry says the change was necessary to close loopholes and bring smaller prizes into the tax net; gaming operators counter that the amendments apply only to betting, lotteries and international jackpots while explicitly excluding casino table and slot-machine payouts.
MontenegroBet, an online gambling association representing several operators, has filed a formal complaint and announced plans to seek constitutional review. In a statement, the group accused the ministry of unequal treatment and suggested some operators received advance notice. "The Ministry of Finance keeps saying publicly that the law will be applied equally, without exception, when the reality is completely different", MontenegroBet said. "Through these unconstitutional and unlawful amendments, the core business activity of privileged operators has been exempted from taxation." The association pointed to past resistance it successfully mounted against a proposed ban on digital wallets for iGaming in 2024 as evidence that it will press the judiciary and regulatory channels again.
MP Armen Šehović (PES) tabled the amendments separately from the 2026 Budget. The ministry argued the previous taxation model was ineffective at capturing revenues from modern betting products, but it has not published a public fiscal impact assessment or modelling to justify the new thresholds and rates, leaving operators and independent analysts seeking clarity on projected receipts and compliance costs.
Related: Montenegro Government Rejects Constitutional Challenge to New Gambling Law
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What This Means for Operators, Players and Regulators
Industry reactions have focused on three immediate consequences: operational disruption, legal uncertainty and competitive distortions. Operators must update customer-accounting systems, withholding mechanisms and reporting flows at short notice, a task that typically requires weeks of testing and regulatory sign-off. Smaller operators and payment providers say the compliance burden and potential cash-flow effects are disproportionately heavy for businesses that lack large IT teams.
Legal specialists warn that the exclusion of casino and slot-machine prizes creates potential equal-protection issues under Montenegrin constitutional law.
A Ministry of Finance spokesperson defended the reform, saying the older threshold and flat-rate approach had failed to keep pace with new products and cross-border jackpots. "The previous taxation model did not capture modern betting products and allowed avoidance; these amendments are necessary to protect the public purse and to create fairer taxation of small and mid-sized prizes", the spokesperson said. The ministry declined to publish detailed revenue projections before implementation.
Montenegro’s broader regulatory environment has been under scrutiny since new gambling legislation was enacted in August to align national rules with EU standards on licensing, payments, customer verification and advertising. In December, the government rejected calls for a constitutional review of that legislation, with Prime Minister Milojko Spajić emphasizing a crackdown on "grey areas" in gambling. The latest tax measure adds a fresh flashpoint between regulators and industry as players weigh litigation, administrative appeals and dialogue with Belgrade and Podgorica authorities.
Legal proceedings and clarifying guidance from the finance ministry are now the most likely paths forward. Operators say they will pursue both litigation and lobbying for rapid clarification, while regulators face pressure to publish the fiscal analysis that underpinned the changes. A high-court challenge, if mounted, could take months and would be closely watched by operators across the Western Balkans concerned about fiscal stability and regulatory predictability.
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