Croatia urges payment firms to block unauthorised gambling payments

Croatia’s regulated gambling sector has taken renewed action to address what it describes as persistent weaknesses in the enforcement of payment restrictions against unlicensed operators. The Croatian Association of Gambling Operators has formally engaged with several major international payment providers after conducting internal compliance testing that, according to the association, revealed widespread ability for Croatian consumers to transfer funds to offshore gambling platforms despite a statutory prohibition.

The trade body, known locally as HUPIS, has initiated discussions with global financial services companies including Revolut, Skrill and Paysafe. The objective is to strengthen transaction monitoring systems and prevent payment processing to operators that do not hold a valid Croatian gambling licence.

The move follows what HUPIS describes as inconsistent practical enforcement of existing legal provisions. While Croatian law clearly prohibits the facilitation of payments to unregistered gambling operators, the association argues that technological gaps and cross border payment flows continue to enable access to offshore platforms.

Legal framework and enforcement concerns

Croatia’s General Tax Act explicitly prohibits the processing of payments for gambling services provided by operators that are not registered or licensed under Croatian law. In principle, this measure is intended to protect consumers, ensure regulatory oversight and safeguard state revenues derived from licensed gaming activities.

However, according to HUPIS, the real world implementation of these legal provisions has been uneven. In April of last year, the association undertook a review of enforcement mechanisms related to the payment ban. The review concluded that legal obligations were frequently not being enforced in a consistent manner across payment channels.

To assess the situation in greater detail, HUPIS conducted test transactions involving 17 foreign gambling websites that were not licensed in Croatia. The tests were carried out using common payment methods available to Croatian residents. These included locally issued bank cards, prepaid payment vouchers such as Paysafecard and digital wallet services including Revolut.

The results, as presented by the association, indicated that a significant proportion of transactions were processed without effective restriction.

Findings from compliance testing

Following the internal investigation, HUPIS Secretary Filip Jelavić provided a public statement to local media outlining the findings. His remarks were reported as follows:

“Bank cards issued in Croatia were successfully used for payments to almost 50% of the tested illegal operators, despite the legal ban. Paysafecard worked in 100% of cases for the nine operators we tested.

“Payments were almost always instant, with no checks or restrictions. Although withdrawals were sometimes hindered, bank transfers and Revolut options remained available, revealing additional gaps in oversight.”

According to the association’s summary of results, deposits were largely processed without delay. Withdrawal restrictions were applied inconsistently and in some cases did not effectively prevent players from accessing financial services linked to unlicensed platforms.

HUPIS has framed these findings as evidence of operational shortcomings rather than deliberate non compliance by financial institutions. It has emphasised the need for enhanced coordination between regulators, payment providers and banks to ensure that existing legal provisions are implemented effectively.

Engagement with the Croatian Association of Banks

In addition to discussions with international payment companies, HUPIS has indicated that it plans to work closely with the Croatian Association of Banks to improve transaction monitoring and compliance controls.

The Croatian Association of Banks has stated that its member institutions comply with all applicable domestic regulations. The gambling trade body has acknowledged this position while maintaining that its testing demonstrates areas where enforcement mechanisms may require technical reinforcement.

The dialogue between the gambling industry and the banking sector is expected to focus on refining transaction blocking systems, improving identification of high risk merchant codes and ensuring that payment service providers have access to up to date lists of unlicensed operators.

Industry representatives argue that clearer operational guidelines and stronger data sharing protocols could help reduce the volume of transactions directed toward offshore gambling platforms.

Offshore operators respond to scrutiny

HUPIS has reported that several foreign operators accessible to Croatian players have introduced corrective measures after being contacted by the association. Among those identified are Stake and Gamdom, which are said to have implemented steps to restrict or limit access from Croatian users.

The association has not alleged criminal wrongdoing by specific entities but has stated that certain operators have responded constructively to outreach efforts. This approach reflects a strategy that combines regulatory reporting with direct communication aimed at voluntary compliance.

In parallel, HUPIS has begun reporting affiliate websites that promote unlicensed gambling services to the relevant authorities. Affiliate marketing channels are viewed as a significant driver of traffic to offshore operators. By addressing both payment flows and promotional pathways, the association seeks to reduce the overall attractiveness and accessibility of unlicensed platforms.

Fiscal implications for the state budget

Beyond consumer protection considerations, the financial impact on public revenues remains a central concern. HUPIS estimates that Croatia’s state budget loses approximately €250 million each year in unpaid taxes and licensing fees linked to foreign bookmakers operating outside the domestic regulatory framework.

While precise figures are subject to estimation methodologies, the association maintains that the offshore market represents a substantial leakage of taxable gambling activity. Licensed operators contribute through gaming taxes, licence fees and other fiscal obligations that support public finances.

The existence of an accessible offshore market, industry representatives argue, undermines both competitive neutrality and the integrity of the regulated system. When consumers can deposit funds through mainstream payment channels to unlicensed sites, the deterrent effect of statutory prohibitions may be diminished.

Regulatory balance and legal caution

The current initiative unfolds within a broader European context where cross border digital services pose complex regulatory challenges. Payment providers often operate across multiple jurisdictions and must reconcile domestic legal requirements with international operational structures.

From a legal perspective, enforcement actions must be proportionate and grounded in clear statutory authority. HUPIS has therefore emphasised cooperation rather than confrontation in its engagement with financial institutions.

The association’s public communications have focused on systemic improvements rather than accusations. This measured approach reflects the sensitivity of regulatory discussions involving financial intermediaries and multinational technology companies.

Observers note that effective enforcement typically requires coordinated action between tax authorities, financial regulators, telecommunications bodies and industry stakeholders. Isolated measures may prove insufficient in a digital environment where services can be accessed across borders with relative ease.

The path forward for compliance

Looking ahead, HUPIS has indicated that it will continue monitoring payment flows and reporting suspected non compliant activity to authorities. Further technical testing may be conducted to assess whether improvements are implemented following dialogue with payment companies and banks.

For payment providers, enhanced compliance may involve refining merchant category controls, implementing geolocation filters or strengthening due diligence procedures regarding gambling related merchants. Banks may also consider additional transaction screening tools designed to detect payments linked to unlicensed operators.

At the policy level, regulators may evaluate whether existing legal instruments provide sufficient clarity and enforcement capacity or whether supplementary regulatory guidance is required.

The overarching objective articulated by the gambling trade body is the protection of the regulated market. By reducing financial access to unlicensed platforms, industry representatives contend that consumer safeguards, responsible gambling standards and tax compliance can be better maintained.

Conclusion

Croatia’s renewed effort to curb payment flows to unlicensed gambling operators underscores the ongoing tension between national regulatory frameworks and the borderless nature of digital financial services. The Croatian Association of Gambling Operators has sought to address what it describes as enforcement gaps through direct engagement with payment companies and banks, backed by internal compliance testing.

While the legal prohibition on processing payments to unregistered gambling operators is clearly established in Croatian law, its practical implementation appears to face technical and operational challenges. The reported €250 million annual fiscal impact highlights the economic stakes involved, alongside broader considerations of consumer protection and regulatory integrity.

The outcome of the current engagement will likely depend on sustained cooperation between industry stakeholders, financial institutions and public authorities. A coordinated and legally robust approach may prove essential in ensuring that statutory prohibitions are not merely theoretical but effectively applied in practice.

In a rapidly evolving digital marketplace, Croatia’s experience may serve as a case study in how jurisdictions attempt to reconcile national gambling regulation with globalised payment ecosystems.

FAQs

What is the Croatian Association of Gambling Operators?
It is a trade body representing licensed gambling operators in Croatia and is commonly referred to as HUPIS.

What legal rule prohibits payments to unlicensed operators in Croatia?
Croatia’s General Tax Act prohibits the processing of payments for gambling services provided by unregistered operators.

Why did HUPIS conduct test transactions?
The association sought to assess whether the statutory payment ban was being effectively enforced in practice.

Which payment methods were tested?
The testing included Croatian issued bank cards, Paysafecard vouchers and digital wallet services such as Revolut.

What were the main findings of the investigation?
According to HUPIS, many deposits were processed without restriction and withdrawal controls were applied inconsistently.

How much tax revenue is estimated to be lost annually?
The association estimates that approximately €250 million per year is lost due to offshore gambling activity.

Have any operators responded to engagement?
HUPIS has stated that certain foreign operators introduced corrective measures following contact.

What role do banks play in enforcement?
Banks are responsible for complying with applicable regulations and may implement transaction monitoring systems to block prohibited payments.

Are payment providers accused of wrongdoing?
Public statements from the association focus on operational gaps rather than allegations of intentional misconduct.

What is the intended outcome of the current initiative?
The objective is to strengthen enforcement, protect consumers and ensure that gambling activity within Croatia remains within the licensed regulatory framework.