Key Compliance Risks for iGaming Companies Operating in Armenia

Levon Aghabalyan Junior Lawyer

Michael Hovhannesyan Senior Partner, Attorney at Law

A legal analysis for operators entering or currently active in the Armenian market

Armenia has spent the better part of four years turning what was once a permissive gambling market into one of the most heavily regulated in the South Caucasus. The process has not been smooth. Tax revenues from the sector fell from roughly $85 million in 2020 to around $40 million by 2024, even as online betting turnover grew dramatically — the State Revenue Committee recorded nearly $18 billion in total gambling turnover in 2024, of which approximately 98% originated from online platforms. That tension between a booming digital market and a government increasingly uncomfortable with it defines the current compliance environment.

For any iGaming company operating in Armenia — or considering doing so — the question is not whether the framework is demanding, but whether the business can be structured to absorb what is now a layered and fast-moving set of obligations. This article sets out the principal areas of legal risk as they stand in mid-2026.

I.  The Legislative Framework

The governing statute is the Law on Regulation of Gaming Activities (No HO-263-N), adopted by the National Assembly in June 2024 and in force since 1 January 2025. It replaced earlier legislation and introduced a significantly more structured regime: geo-blocking obligations, mandatory .am domain hosting, a register of restricted foreign domains shared with the Central Bank of Armenia, real-time electronic monitoring, and enhanced player protection requirements.

The Ministry of Economy has assumed policy oversight from the Ministry of Finance, though the State Revenue Committee (SRC) retains day-to-day enforcement and licensing authority. Two new bodies — the Gaming Sector Monitor and the Gaming Operator Institute — are being established to take on technical supervision. Until they are fully operational, transitional oversight remains with the Ministry of Finance. A dedicated gambling regulator is expected to be formally announced in the near term.

• Note for practitioners: The Law was further amended in March 2025 (ZR-48). Secondary regulations under HO-263-N are still being finalised; the framework is not yet complete and practitioners should expect further administrative instruments in 2026.

II.  Principal Compliance Risks

1.  Market Access: The Local Establishment Requirement

Only commercial entities registered in Armenia may hold an operating licence. Under Article 4 of the Law on Games of Chance, internet gambling may be organised solely by entities with Armenian legal personality and a valid licence from the competent authority. Foreign-registered operators are prohibited from serving the Armenian market — and the prohibition is now backed by financial enforcement infrastructure.

From May 2026, Armenian commercial banks and payment institutions are required to block MCC 7995 transactions (the card network code for gambling services) unless they originate from licensed local operators. Internet service providers are simultaneously required to block unlicensed gambling websites. The practical result is that an offshore operator targeting Armenian players without a local licence faces both payment blocking and site inaccessibility — a two-layer enforcement mechanism that is considerably harder to circumvent than domain blocking alone.

On the technical side, licensed platforms must host under the .am domain and connect to the state’s centralised electronic monitoring system. All gaming software must hold international certification and comply with a mandatory 90% return-to-player threshold. Cash payments are prohibited for online operations; only bank cards and approved electronic payment methods are accepted.

• The minimum age for participation in all gambling forms except lotteries is 21, not 18 — a compliance detail for KYC procedures that is frequently overlooked by operators accustomed to EU-licensed markets.

2.  Tax Exposure: A Cumulative Burden

The tax position has changed substantially since 2024 and continues to change. Operators now face the following principal obligations:

Obligation	Rate / Condition	In force
Turnover tax (online casinos)	10% of gross betting turnover	1 July 2025
Corporate income tax	18% on organiser profits	Ongoing
Licensing fees	Doubled; annual increases to 2028	April 2025
Player winnings — standard	5% withheld at source	Ongoing
Player winnings — large (>AMD 5M)	10% on the excess amount	Ongoing
Player winnings — unlicensed operator	20% punitive rate	Ongoing

Two points deserve attention. First, the 10% turnover tax applies to online casino operators but not to bookmakers — a structural asymmetry already distorting competition within the sector. Second, the legislation provides that if the new dedicated gambling regulator is not operational by 2028, tax rates could increase up to fivefold. That is a legislated backstop, not a theoretical contingency, and any business plan must account for it.

The combined weight of turnover tax, corporate income tax, and increased licensing fees makes Armenia a materially higher-cost jurisdiction than it was three years ago. Industry observers note that tax revenues from the sector have roughly halved despite a dramatic increase in market size, suggesting that compliance costs are already reshaping the operator landscape.

3.  AML, KYC, and Payment Controls

The 2025–2026 reforms have materially tightened AML and KYC obligations. Operators are required to verify player identity, age (against the 21-year threshold for most products), and source of funds. Player accounts must be individually maintained and linked to verified bank cards or payment instruments. Servers hosting gambling operations and player data are generally required to be physically located within Armenia or in jurisdictions approved by the relevant authority.

The new payment controls add further obligations. Operators must ensure their transactions are cleanly identifiable as originating from a licensed Armenian entity — any payment processing ambiguity risks triggering the bank-level blocking that applies to unlicensed MCC 7995 transactions.

Violations of AML obligations carry administrative fines of up to AMD 1,000,000 (approximately EUR 2,240), with formal warnings and corrective instructions issued by the SRC as a precursor to more serious enforcement. Given that the SRC imposed landmark sanctions on major online gaming organisers in 2024 for unfair competition and misleading advertising, there is no basis for treating enforcement action as theoretical.

4.  Advertising: A Near-Total Ban

Armenia introduced a broad prohibition on gambling advertising in 2022, covering media, public outdoor spaces, and online channels. The permitted exceptions are narrow: advertising is allowed on operators’ own official websites, within licensed casino or bookmaker premises, and at border entry points and in hotels rated four stars or above.

That last carve-out is under active legislative pressure. A bill introduced in May 2025 by a Civil Contract MP seeks to remove permission to advertise at airports, border checkpoints, and hotels altogether. The proposal reflects political concern about the impression Armenia makes on arriving visitors — a motivation that has nothing to do with gambling harm but which is likely to succeed given the parliamentary numbers.

Operators are also prohibited from using unlicensed terminology in advertising or company names, carrying its own administrative exposure. Any marketing activity — including affiliate arrangements and sponsorship — requires legal review against current Armenian law, not just the position at the time of initial licence application.

5.  Responsible Gambling and Player Protection

Armenia’s tightening of responsible gambling requirements is driven by acute domestic concern rather than EU-style harmonisation. Official reports in 2024 linked gambling-related debt to a significant proportion of suicides within the military — a social reality that has given political urgency to enforcement in this area specifically.

Current obligations include mandatory stop-play tools, prohibition on allowing access to individuals in bankruptcy or receiving social assistance, and player verification requirements that must be satisfied before any participation is permitted. These are minimum standards. The Gaming Sector Monitor and Gaming Operator Institute, once operational, are expected to introduce more detailed technical specifications.

• Non-compliance with responsible gambling mandates is a high-profile enforcement priority for the SRC. These are the political core of the current regulatory programme, not procedural requirements.

6.  Penalties and Enforcement Exposure

The administrative sanctions regime carries specific financial thresholds. Operating outside permitted hours attracts fines of AMD 200,000–300,000 (EUR 448–672), rising to AMD 500,000 (EUR 1,119) for repeat violations. ISPs that fail to carry out geo-blocking face fines of up to AMD 1,000,000 (EUR 2,239), rising to AMD 3,000,000 (EUR 6,717) for repeat failures. AML violations and improper advertising carry fines up to AMD 1,000,000 (EUR 2,239).

Criminal liability attaches where unlawful gambling activity causes damage exceeding AMD 500,000. The Criminal Code provides for fines of AMD 500,000–1,000,000, arrest for one to three months, or imprisonment of up to one year, with concurrent disqualification from management positions for up to one year. Mandatory confiscation of all IT equipment and game products is also prescribed for unlicensed operation.

The 2024 CCPC sanctions against major online gaming organisers for misleading advertising demonstrate that enforcement is active. Crucially, the Competition and Consumer Protection Commission acted independently of the SRC — meaning operators face potential exposure from multiple authorities simultaneously, without any single compliance function being sufficient to monitor all risk.

7.  Regulatory Volatility as a Compliance Risk in Itself

The most underappreciated risk in the Armenian market is the pace of legislative change. Since 2022, the framework has been amended at least four times materially, with the 2025 package being the most extensive overhaul. Further changes are already in the pipeline: secondary regulations under HO-263-N are still being developed, the dedicated gambling regulator has not been formally established, and political pressure continues to build around advertising, taxation, and access controls.

The National Association of Gaming Operators has publicly warned that progressive restriction may simply displace legal operators and send players to unlicensed offshore platforms where consumer protections do not apply. That argument has had limited traction with the Armenian government. Operators should plan on the assumption that the current compliance burden represents a floor, not a ceiling.

III.  Practical Considerations

Several principles follow from the analysis above.

• Local incorporation is not optional. The requirement for Armenian legal personality is statutory and now enforced through payment blocking infrastructure. There is no viable route to market through a foreign entity.
• The tax model requires early financial modelling. The 10% turnover tax (for online casinos), doubled licensing fees, and 18% corporate income tax represent a materially different cost structure than most EU-licensed jurisdictions. Business plans built on revenue projections from other markets will not translate without adjustment.
• AML and KYC must be built to Armenian specifications. The 21-year minimum age for most products — not 18 — is the most commonly missed compliance difference. Data localisation requirements should be assumed from the outset, as these are being clarified under secondary legislation.
• Advertising and marketing require continuous legal review. The prohibition is broad, the remaining exceptions are under active legislative pressure, and enforcement involves multiple independent authorities.
• Regulatory monitoring must be treated as an ongoing operational function, not a one-time compliance exercise at licence application. The framework will continue to change; the only question is how quickly.

IV.  Conclusion

Armenia is a significant iGaming market. Online betting turnover of $18 billion in a country with a GDP of roughly $30 billion is an extraordinary figure, and the digital penetration of the sector creates a genuine commercial opportunity for operators with the infrastructure and appetite to participate.

But the compliance burden is real, cumulative, and still growing. The government is committed to tightening the framework — motivated by genuine social concern and by political visibility of a sector that has become conspicuous. Operators who approach Armenia as a light-touch jurisdiction will be disappointed. Those who invest in local legal counsel, AML and KYC infrastructure, and regulatory monitoring will be better positioned to sustain operations through what is likely to remain a volatile regulatory environment for the foreseeable future.