Azerbaijan is considering an alternative tax for lottery and sports betting operators based on gross gaming revenue (GGR), with the existing 6% simplified tax on turnover retained as an option. The change appears in a proposed Tax Code amendment within the 2027 budget package.
The proposed GGR rate is 22%, according to national news agency Report.az's account of the draft and a November 6 statement from State Tax Service official Nicat Imanov. It would apply to the amount left after player prizes are deducted from sales, rather than the full value of tickets or bets accepted. Operators would be able to choose between that basis and the current turnover-based system.
A turnover tax applies to stake or ticket revenue before winnings are paid, while the proposed GGR option would calculate tax after those payouts. The eventual effect on an operator's bill would depend on its prize ratio and the final wording of the law.
The draft also addresses income tax on player winnings. Current Tax Code provisions exempt lottery and sports betting winnings of up to AZN 500 ($294), while larger winnings face a 10% tax.
APA reported that lawmakers are considering removing that charge, except for promotional lotteries, or otherwise reducing the burden. The proposal links the change to a concern that players facing tax on larger wins may shift to unlicensed betting sites.
The measures are part of a broader budget process. Azerbaijan's parliamentary Economic Policy, Industry and Entrepreneurship Committee began discussing the 2027 budget package on November 4.
A separate budget projection, reported by APA, expects tax payments from sports and betting games to be AZN 6.4m higher in 2027 than this year's forecast. That projection should not be treated as the expected yield of the proposed GGR option.
The country's licensed sector includes Azərlotereya, which runs the national lottery and says it became one of Azerbaijan's two lawful sports betting operators in 2022.
The proposed changes would alter the tax choices available to authorised operators without opening the market to unlicensed providers.
Parliament has yet to pass the amendment and an effective date has not been confirmed.
Azerbaijan's central bank warned in May that millions of manats were being transferred abroad through illegal gambling payments, providing context for the proposal's stated aim of keeping players with licensed operators.
The draft is part of Azerbaijan's 2027 budget package, which remains before Parliament
