The government of Montenegro has been called on to explain the reasons for adopting amendments banning electronic payments for gambling.
Conflicts began in the country after the government confirmed its intention to “amend gambling laws” to prohibit the use of modern payment systems for gambling.
These controversial amendments violate EU competition rules by blocking e-banking, IPS and mobile payment services such as PayPal and Apple Pay.
Controversy has emerged around the government of Montenegro plan to strengthen anti-money laundering (AML) requirements to address problems highlighted by MONEYVAL, the Council of Europe’s financial monitoring body.
Montenegro was asked to “intensify efforts to investigate and effectively prosecute money laundering cases, and strengthen supervision of high-risk non-financial businesses and professions.”
In response, the Ministry of Finance recommended amending Article 68 of the Gambling Law of Montenegro to prohibit the use of electronic payment systems for gambling.
The amendment caused turmoil in Montenegro’s gambling sector, forcing consumers to transfer funds into their online accounts exclusively through bookmakers or using a card at a betting operator’s terminal.
The industry demands an explanation
The gambling industry in Montenegro reacted violently to these amendments. Jovana Klisic, a spokeswoman for national trade association MontenegroBet, described the industry as “at a crossroads”.
SBC News reports that gambling is in chaos in Montenegro due to a ban on electronic payments. Jovana Klisic from MontenegroBet emphasized that the sector, which directly or indirectly employs about 2% of Montenegro’s workforce, faces serious risks due to these legislative changes. In a country with an unemployment rate of 15%, the potential loss of jobs in the gambling sector could have devastating economic consequences.
A petition against the amendments, calling for the changes to be stopped, collected 25,000 signatures – roughly 8% of voters – in just five days. This rapid and widespread support underscores significant public concern about the potential impact on jobs and the broader economy.
Klisic noted: “The removal of e-banking and mobile payment options, despite their compliance and transparency, not only hampers operational efficiency but also jeopardizes employment in the sector. The economic effects of such legislative measures could ripple outwards, affecting other areas of the Montenegrin economy”.
Ban threatens Montenegro’s EU ambitions
The amendments to Article 68 have wider legal and economic implications, particularly in relation to Montenegro’s aspirations to join the European Union.
Critics argue that the changes contradict several key EU legal provisions, including the Stabilization and Association Agreement between Montenegro and the EU and the Payment Services Directive, which aims to create an integrated electronic payments market.
In addition, the amendments violate the fourth and fifth EU anti-money laundering directives, which consider cash transactions to be a high risk for money laundering.
The Montenegrin government, by promoting a cash-based system, is perceived as an inadequate solution to the problem of money laundering, potentially exacerbating the situation.
Montenegro’s decision also runs counter to recent EU initiatives such as the introduction of European Digital Identity (e-ID), which aims to standardize electronic identification across member states.
The initiative aims to facilitate safe and efficient online transactions, including gambling, highlighting the differences in approaches between Montenegro and the EU.
The way forward
The MontenegroBet Association submitted a petition to the National Assembly and initiated a review of the constitution, questioning the legality of the amendments.
The association is also cooperating with international institutions to draw attention to the negative consequences of these legislative changes and their inconsistency with EU directives.
Klisich and others in the industry hope significant public support and institutional pressure will prompt a reconsideration of the amendments. Klisic said: “Our main goal is to bring Montenegro’s regulatory framework in line with EU regulations and global financial standards, ensuring a fair and transparent environment for the industry.”
The Montenegrin government’s position has isolated the country not only from EU practices, but also from the wider global financial community, which is increasingly embracing digital payment solutions for transparency and efficiency reasons.
Organizations such as MONEYVAL and the Financial Action Task Force (FATF) advocate reducing cash transactions to reduce money laundering risks and increase financial transparency.
Amendments to Montenegro’s gambling laws have caused serious concern within the industry and beyond. The decision to ban electronic payments is seen as a step backward, contrary to EU standards and global trends. The response from the public and industry was swift and decisive, with numerous calls for the government to reconsider its position.
The outcome of this legislative battle will have far-reaching consequences for Montenegro’s gambling sector, its economy and future relations with the EU.
While Montenegro grapples with this complex issue, the main goal remains clear: to ensure that the country’s financial and regulatory framework supports a fair, competitive and transparent gambling industry that is in line with international best practice.
Klisic emphasized: “This is about more than just correcting one law; it is about ensuring that Montenegro’s financial and regulatory framework benefits a fair and competitive industry.”
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