Taking a gamble in North Macedonia.

Gambling is potentially lucrative, but it can bring serious risks, including an opening for organized crime. In January 2019, the Albanian government took the decisive step of banning all electronic casinos and sports-betting shops. Explaining this decision, Prime Minister Edi Rama cited the social and economic problems that gambling was creating for many Albanian families. He noted that in Albania, ‘in large part the gambling activities are financed by organized crime. There is money that is being laundered through gambling and people in organized crime are involved indirectly or directly in this sector.’ ¹ As a result, 4 364 establishments that hosted electronic casinos or sports betting were closed down. However, the National Lottery and a big casino in central Tirana are still operating and the possibility remains for new casinos to be built on the premises of five-star hotels. This puts control of gambling in the hands of a few.

In March 2019, the Kosovar government took even more drastic measures: new legislation banned all gambling activities in the country, in part because of the industry’s links with organized crime.² Establishments that did not comply were forcibly shut down. For example, in September 2020, hundreds of police officers took part in an operation to close an illegal casino in the village of Karachevo, close to the border with Serbia. At least 35 people were arrested on charges of illegal gambling, prostitution and possession of guns and drugs. Some of those arrested were border police officers.³

The decision to ban gambling has had economic consequences. It is estimated that 7 280 people lost their jobs in Albania due to the decision, while the state forfeited around €45 million in tax revenue.⁴ In Kosovo, about 350 businesses involved in gambling were closed, leaving thousands of people unemployed. In 2018, these businesses had paid almost €16 million in excise tax.⁵

While Albania and Kosovo have taken resolute steps to curb gambling, neighbouring North Macedonia has seen a major increase in gambling since 2019. According to data from the Macedonian Ministry of Finance, 40 licenses have been issued to companies to conduct gambling activities.⁶ More than half of these licenses have been issued in 2019 and 2020 (see figure 2), after the gambling restrictions came into effect in Albania and Kosovo. These companies have the right to open electronic casinos or betting shops throughout the country.

Gambling in North Macedonia

Figure 2 Number of companies with licences to conduct gambling activities in North Macedonia.

Source: North Macedonia Ministry of Finance

For the past twenty years, casinos and betting shops have been a familiar sight in North Macedonia’s capital, Skopje, or Gevgelija, in the south of the country. But since 2019, quiet towns like Ohrid and Struga, close to the border with Albania, have seen a dramatic increase in the number of casinos and betting shops. Indeed, North Macedonia seems to have turned into an oasis for gambling in the region.

In the July 2020 parliamentary election, gambling was not a big issue. Although Prime Minister Zoran Zaev has recognized the negative effects of casinos and betting places in some communities, he has also made it clear that his government will not rush to ban the sector, but rather will monitor it closely and take measures to regulate it.⁷

North Macedonia’s gambling boom is good for its economy. Metodi Hadji-Janev, a law professor and expert on the gambling sector at the Military Academy in Skopje, said that in 2020 the number of people directly employed in the gambling sector increased to 7 700; there are around 54 000 other gambling-related jobs in the country, bringing the state budget millions of euros in taxes.⁸

However, there are also hazards associated with gambling, such as addiction, socio-economic vulnerability and crime. In their decisions to restrict gambling, Albania and Kosovo specifically cited concerns about increased poverty, family violence and illegal activity as gamblers struggle to pay for their habit. According to Hadji-Janev, ‘once they have exhausted their own resources, gamblers often start spending someone else’s money and put their family in danger because they are prone to illegal loans, namely usury’.⁹

The growth in gambling is changing the character of some cities. There are concerns that Ohrid, a protected UNESCO site, risks becoming a magnet for tourists attracted to gambling rather than the historical beauty of the city.¹⁰ Struga, which used to be a quiet town, is now overrun with casinos and sports-betting shops, which often have garish exteriors and bright, flashing lights.

As highlighted in the August 2020 GI-TOC report ‘Illicit financial flows in Albania, Kosovo and North Macedonia’, gambling – whether at physical or online casinos – point- of-sale slot machines or sports betting, has long been identified as a money laundering channel in the Western Balkans.¹¹ According to North Macedonia’s former interior minister, Pavle Trajanov, there is ‘a possibility that money of criminal origin can be laundered through the casinos and is legalized in the process’.¹² Furthermore, Trajanov noted that prostitution is often linked with the casino business.

In short, North Macedonia is taking a gamble. While two of its neighbours – Albania and Kosovo – have severely restricted gambling, North Macedonia seems to be raising its profile as a place for betting. While there are wins to be made in terms of jobs and tax revenue, there are also potential losses, including changing the country’s image – and that of some of its most famous tourist destinations – and attracting organized crime, money laundering and addiction. The stakes are high.

Notes