Enlabs blasts Latvian parliament over igaming shutdown

Enlabs has criticised Latvia’s parliament for introducing a temporary suspension on all licensed land-based and online gambling in the country, saying this could lead to a rise in unregulated activities.

Today (6 April), the Lotteries and Gambling Supervisory Authority confirmed to iGB that a law passed last month ordering all casinos, gambling halls, bingo halls and betting locations to close to reduce the spread of novel coronavirus (Covid-19) will also apply to online gambling.

The law is effective immediately and will run to at least 14 April, though there is potential for this period to be extended by up to three months. This will mean that all licensed online gambling operators in Latvia, including Enlabs, will not be permitted to offer their services to consumers in the country.

However, Enlabs’ chief executive and president George Ustinov hit out at the decision to halt online gambling, warning that this could lead to an increase in illegal igaming during the temporary suspension.

“The main argument of parliament was to protect financially vulnerable people from excessive expenditure,” Ustinov said. “In our opinion, this goal will not be achieved as suspension of regulated market will only open doors for illegal operators.

“Customers receive significantly higher protection with us, offering a vast set of gaming behaviour-controlling tools and integration to the central self-exclusion registry. But in these unprecedented times common sense sometimes is not an argument and we think that globally other countries might follow this trend if the situation does not improve soon. Our goal is to create an entertainment and to do this in a safe manner.

“This adverse regulatory development will demonstrate to the politicians that the real threat to the financially vulnerable people are the illegal operators. Hopefully our voice about balanced regulation and market protection will get heard after the crisis.”

In terms of the impact of the suspension on its business, Enlabs said the financial effects of the order will depend on the length of the temporary suspension, but added that it would be able to manage its cost base efficiently, as 50% of costs are direct and will not occur without revenue.

The operator said any fixed costs could be temporarily lowered without losing any staff, through cost cutting efforts and state subsidies. As such, it said it expects to break-even level on its bottom line during the period of closure.

Enlabs also said it would use the shutdown to focus on a number of development projects that would help improve its service offering in Latvia and elsewhere.

The operator plans to perform a “critically important technology migration” of its Latvian business to the new gaming platform, which it said would bring significant user experience, operational improvements and annual cost savings of around €1m (£878,180/$1.1m).

Meanwhile, Enlabs said it would work on the launch of online gaming operations in Belarus, with the aim of becoming one of the top three operators in the newly regulated market.

“This is a temporary lockdown which we will easily survive; upon return our Latvian customers will see an enhanced product and we will achieve new heights,” Ustinov added. “Meanwhile we get back to work. This time will require even more effort from the team than before. We will take care of each other and will come out strong.”