G3-247 Report BULGARIA MARKET REPORT
Rumyana Parusheva Bulgarian Gaming Association (BTAMOGI)
“Online gambling in Europe is a fast growing business with an annual growth of almost 15 percent. Revenue from online betting in Europe is expected to reach €13bn in 2015 according to European Commission statistics, published in October 2012. Internet gambling within the European market represents 45 percent of the global market. The economic significance of the sector is reinforced by the high level of innovative technologies developed and used, as well as continuously increasing tax revenue for Member States.
The regulation of online gambling in Bulgaria is considered as one of the best in Europe, but of course, it could be improved further. In the last years the government took decisive measures to improve the business environment for internet gambling through key amendments in the Gambling Act. Previous taxation of online gambling operators was abolished by introducing a two- component fee consisting of a fix rate of BGN100,000 for an online betting licence and variable proportion of 20 percent of the difference between the value of the bets made and the winnings paid out, and for games for which participation fees and commissions are collected - in the amount of 20 percent of the value of the fees and commissions received.
In line with European trends to improve regulations on responsible gambling, an annual contribution was introduced for organisers of games of chance. Collected funds in the state budget should be spent on organising of events and promoting of responsible gambling measures.
A number of changes were made in the subsidiary gambling legislation. With amendments to the Tariff of fees collected under the Gambling Act, fees have been reduced for registration of amendments on already issued licence, concerning certain categories such as a change of a management or controlling
body, and also of owner, partner or shareholder, or transformation of an organiser. The fee for submitting documents electronically was decreased by 20 percent. Changes in other regulations reduced amount of information that organisers need to collect for registration of online betting participants as well as documents that laboratories should submit to be listed by the State Commission on Gambling. As a result of these amendments Bulgarian gaming market witnessed a rapid influx of foreign legal entities to the local market, competing with local licensed online operators.
Currently there are 12 licences granted to eight legal entities. At the same time the State Commission on Gambling continues its activities on monitoring and closure of websites offering unlicensed online betting.
In general, the market prospects for online betting in Bulgaria are excellent, not least due to the favourable tax regime. Lower fees and lower taxes allow gaming operators to compete and grow their business, so we expect new online operators, both foreign and local, to enter the market in the coming months and years.
The government is expected to prepare a comprehensive strategy on taxation of organisers of gambling activities, as well as ordinance on procedures and way of spending of responsible gambling funds, that the state collects from all organisers of games of chance as a fee.
Another challenge is to strike a balance with the taxation of land-based operators. Maintaining high taxes in this sector is a common practice of governments to ensure stable and predictable substantial budget revenues. Furthermore, according to experts that big difference between taxation of online and land-based gaming creates arbitrage opportunities and artificially erodes land-based business revenues in favour of their online competitors, mostly foreign operators. All this justifies the need to rethink and demand balance in long term.
There is still a deficit in regulation of advertising, albeit under strict control, as well as in regard of establishing a working mechanism for raising and spending of funds for prevention of problem gambling, protection of minors and consumers in general. There are also some reserves to further reduce unnecessary administrative burden in terms of collection and storage of information for the purposes of regulation and control.”
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