Luxembourg weighs a state-run online gambling monopoly
- Kevin Jones
- 7 days ago
- 7 min read
Luxembourg is preparing a bill that would centralise online gambling and gaming machines under a state-controlled model. The National Lottery would lead the offer, and the authorised land-based casino could receive an online licence once geoblocking and player-protection systems are proven. The government frames the move as a response to rising harm indicators, and as a way to shut down grey devices in cafés. This runs against Europe’s multi-licensing drift, so the proposal will draw scrutiny under EU proportionality tests. For operators, consumer licences look unlikely, so the practical route is B2B supply to the Lottery or a single casino channel. For suppliers and payments firms, procurement discipline, measurable harm-reduction tooling, and airtight AML controls will decide access. The outcome will shape how a small but wealthy market channels spend, sets product design rules, and polices offshore access.
Luxembourg’s government is exploring a legal monopoly covering online gambling and gaming machines. Justice Minister Elisabeth Margue told parliament on 30 October that a reform is being drafted. The plan would reserve gambling to the National Lottery and the country’s authorised casino. Cafés would be limited to National Lottery terminals. Other devices, including so-called skill machines, would be prohibited. The minister also flagged the need to solve geoblocking and player-protection issues before granting any online licence to a casino operator. The move is linked to a sharp rise in treatment demand for gambling harm and a budget increase for the national addiction centre. If enacted, Luxembourg would buck Europe’s shift toward multi-licensing. The decision will shape how operators, suppliers and payments firms can access a wealthy but tightly controlled market.
What happened
During a parliamentary interpellation on gambling and online betting, Justice Minister Elisabeth Margue said the government is preparing a bill that “provides for a legal monopoly” in favour of the National Lottery and the official casino. She added that only National Lottery machines would be allowed in cafés and bars. All other devices, including skill-based machines, would be banned. On online, the minister said the casino “could obtain a licence,” while noting open questions on population protection and geoblocking. These are direct statements reported by RTL Luxembourg in French.
The same session highlighted problem-gambling pressures. People seeking help almost tripled between 2020 and 2024, reaching about 100 cases. The state increased funding for the Centre for Excessive Behaviour and Behavioural Addictions, known as ZEV, from €220,000 in 2020 to €560,000 in 2024.
Separate industry reports note that cafés nationwide host unregulated machines. The reform would confine them to National Lottery terminals only. This clarifies that enforcement will target the grey market in bars as well as online access.
How Luxembourg’s market works today
Luxembourg already runs a lottery-centred model. The Œuvre Nationale de Secours Grande-Duchesse Charlotte organises the National Lottery and allocates all profits to philanthropic projects. This framework gives the Lottery a privileged role. It also ties gambling proceeds to social funding, which is a common narrative in monopoly systems. In 2024 the Lottery reported record performance with Gross Gaming Revenue of €90.9 million.
Online activity exists, but only through state-sanctioned channels. Loterie Nationale operates the only legal sports betting site, LoterieSport. Its online hub also carries instant games and slot-style titles associated with well-known suppliers. There is no general licensing pathway for private online casino operators. The lone land-based casino is Casino 2000 in Mondorf-les-Bains.
What exactly might change
Scope. The reform would codify a legal monopoly for the National Lottery and the authorised casino. That would formalise the Lottery’s control over machines in cafés and set the ground rules for any online casino product linked to Casino 2000, subject to player-protection safeguards and geoblocking.
Enforcement. Expect a clampdown on grey-market devices in hospitality venues and tighter measures against offshore online sites. In other monopoly markets, enforcement typically includes DNS blocks, IP blocks, payment interdictions and marketing bans. Luxembourg’s minister referenced geoblocking as a prerequisite, which signals intent to align technical controls before switching on any new online products.
Public-health framing. The sharp increase in treatment demand for gambling harm has become the primary justification for change. The ZEV budget increase provides a policy anchor for a restrictive model that channels play into a supervised network and caps product proliferation in cafés.
Why this bucks the European trend
Europe has steadily moved toward competitive licensing for online gambling. An EGBA analysis last year counted 27 of 31 European countries using some form of multi-licensing, with only a handful retaining full monopoly models. Finland is dismantling its online monopoly and preparing a staged opening from 2026 to 2027. Iceland and Norway remain exceptions. Luxembourg stands out because it lacks a modern online licensing law and is now considering hardening a monopoly posture instead of liberalising.
Can a monopoly survive EU law tests
The Court of Justice of the European Union allows gambling monopolies, but only under strict conditions. Measures must genuinely pursue high-level consumer protection and crime prevention. They must be consistent and systematic. They must avoid expansionist advertising by the monopoly holder. If those tests are not met, restrictions can fall foul of the freedom to provide services. The leading case on online casino monopolies is Dickinger and Ömer against Austria. The court set out the proportionality analysis and warned that expansionist conduct undermines a monopoly’s justification. Any Luxembourg bill will need to pass these tests on paper and in practice.
Strategic implications for the industry
Operators. A monopoly closes the door to B2C licensing. International sportsbooks and casinos will not gain local licences. The realistic route becomes B2B. Content and platform vendors can sell to the National Lottery and, if permitted, to the licensed casino’s online channel. Suppliers with instant-win and e-casino portfolios already present on the Lottery’s site will have a head start. Newcomers should prepare for public procurement processes, evidence-heavy responsible-gaming controls and rigorous AML tech.
Payments and compliance. Payment service providers should expect enforcement designed to cut off unlicensed sites. That includes acquirer pressure, bank BIN filtering and scheme network monitoring. PSPs serving Lottery and casino channels will need robust merchant-initiated transaction controls, SCA alignment and early-warning systems for self-excluded players.
Marketing and affiliates. A monopoly model usually implies comprehensive advertising restrictions and a narrow authorised inventory. Affiliates promoting offshore brands would face greater liability and blocking. Local media sellers should anticipate that Lottery creative remains permissible within “moderate” limits, while direct performance marketing for unlicensed brands is likely to be proscribed.
Land-based to online integration. If Casino 2000 is permitted to offer online products, the government will need to resolve identity verification, cross-border access, and duty of care toolkits. Expect tighter KYC flows, session limits, deposit prompts, and AI-enabled monitoring consistent with the public-health rationale laid out by the minister.
Hospitality venues. The cafés and bars segment will be reshaped. Only National Lottery machines would remain. Illicit or grey machines would disappear. This will shift machine economics toward Lottery terminals and away from independent operators that have supplied skill or amusement devices.
The political economy behind a monopoly choice
Luxembourg’s Lottery profits are earmarked for philanthropic funding through the Œuvre Nationale. Policymakers can argue that a monopoly keeps money in socially directed channels. The record performance posted by the Lottery in 2024 strengthens that narrative. At the same time, the addiction figures provide a public-health justification for limiting the number and type of devices in public spaces and for controlling the design and discovery of online products. This is a classic pairing used by monopoly states. It will be tested against the EU’s requirement that restrictions be genuinely protective rather than revenue-seeking.
What to watch next
The bill’s text. Key questions include the precise definition of “online gambling”, whether online casino games are reserved to Casino 2000 or to the Lottery, the creation or not of a specialised regulator, and the list of enforcement tools against unlicensed operators. The minister’s remarks imply forthcoming answers on geoblocking and player protection.
Procurement signals. Tenders from the Lottery or the casino for platform upgrades, game content, risk engines, KYC, or RG analytics will indicate the technical direction. Vendors should anticipate evidence-based scoring on harm-prevention features.
EU compatibility statements. Explanatory memoranda should outline how the law complies with CJEU case law. In practice, this means strict marketing codes for the monopoly operator and a demonstration that the state is not pursuing expansion in conflict with its stated harm-reduction goals.
Cross-border frictions. Luxembourg sits between liberalised markets in Belgium and France for different verticals. Payment and ISP controls will be crucial for channelisation. The minister’s focus on geoblocking shows awareness of this challenge.
Public-health infrastructure. Watch for sustained ZEV funding and the build-out of treatment capacity. Policy credibility will depend on parallel investment in prevention and research, not only on enforcement.
Luxembourg is unlikely to open consumer licences. The winning strategies will be B2B. Think adjacent value rather than market share. Content studios, platform providers, RG tech, AML analytics and payments orchestration can position for single-buyer procurements. Evidence of measurable harm-reduction, granular risk scoring and conservative marketing toolsets will be decisive. Offshore B2C activity will face heightened blocking and reputational risk. If your strategy assumed a Nordic-style shift from monopoly to licensing, recalibrate. The cycle is moving in the opposite direction here.
