The gambling market in Luxembourg operates within a strictly regulated framework, monopolized by the state, and managed by a stringent licensing process. Unlike many other European countries that embrace an open online gambling market, Luxembourg maintains tight control over its gambling industry, ensuring the state is involved at nearly every level. However, the gambling sector is a significant source of income for the country and government.
State Monopoly and Regulation
The main player in Luxembourg's gambling market is the national lottery (Loterie Nationale), which monopolizes most forms of gambling. While online gambling is permitted, it is restricted to state-run lotteries and sports betting. Currently, private operators of online gambling have not been granted licenses, thus Loterie Nationale holds the exclusive right to offer online lottery and sports betting games.
The country has only one casino in operation: Casino 2000 in Mondorf-les-Bains. This casino holds a local license and strictly controls the types of games allowed, such as roulette, blackjack, baccarat, and slot machines. The operation of the casino has made a significant contribution to national revenue. In 2023, Casino 2000 generated an impressive €24.2 million in fiscal revenue, up from €20.1 million in 2022 and €22.4 million in 2019, before the impact of the COVID-19 pandemic.
Luxembourg's strict control contrasts sharply with more liberalized markets of neighboring countries like France and Germany. Both countries have opened their online gambling industries to private operators, thereby driving market expansion. In contrast, Luxembourg's state-driven model ensures more control but results in lower market diversity and fewer growth opportunities for private participants.
Online Gambling Market Growth
Despite the restrictive framework, according to Statista data, the online gambling market is expected to grow at an annual rate of 5% by 2029. This growth is mainly due to the increasing popularity of online sports betting and gaming. By 2024, the online gambling market's user penetration rate is expected to reach 18%, and by 2029, the number of users is projected to be around 147,600.
Success of the National Lottery
The national lottery has achieved significant success. In 2023, it reached unprecedented results, with total gambling revenue reaching €76.8 million, a 21% increase from 2022. The deployment of new products like EuroDreams and Video Lottery Terminals (VLT) has driven this growth. VLTs alone generated €22.2 million in revenue, becoming the most popular gambling product offered by the national lottery.
"We are proud to announce that the national lottery has reached a new historical high, exceeding our expectations and setting new benchmarks for the coming years. This success is the result of our team's hard work and dedication, continuous innovation, and the trust of our players and partners," said national lottery director Léon Losch (pictured above).
The lottery company combines a strong physical retail network with digital products, a strategy that allows it to continue growing as more customers shift to online sales. In 2023, the company paid €16.2 million in commissions to retailers, further solidifying its importance in the local economy.
