Reports
BULGARIA - SOFIA GAMING MARKET
Locations both within casino halls and sports- betting locations in Bulgaria feature online terminals aimed at promoting play in both environments and to educate players in the use of the single wallet solution. “Sports-betting is becoming increasingly popular in Bulgaria,” describes Mr. Enchev. “We have more than 80 traders and 30 different kinds of sports on offer across 30,000 live events per month. We are seeing 60-75 per cent of play on mobile devices, having just launched a dedicated mobile website and this side of online play in Bulgaria is accelerating very fast.”
THE ONLINE GAMING MARKET In January 2014 Bulgaria adopted a new
gambling taxation regime, which, together with the reasonable and balanced regulations currently in place, made the country attractive for local licensing and gambling operations based upon a low corporate tax. One and a half years after the Gambling Act was introduced, the tax base for gambling has switched from a turnover base to a Gross Gaming Revenue base.
Te taxation of online games in Bulgaria is based on GGR with a 20 per cent tax rate. For games in which fees and commissions are collected (such as poker), the tax rate will be 20 per cent of the collected fees. In addition, there is a single fee for issuing and maintenance of a five-year license, €50,000 (BGL100,000). No annual fee will be required during the five years’ validity of the license. Offline bingo and keno are taxed equally with other games.
Te GGR-based taxation is not a part of the common tax system, but rather an administrative fee regulated entirely in the Act, set apart from tax laws. Nevertheless, any operator who decides to have an establishment in Bulgaria can take advantage of favorable and stable corporate tax at 10 per cent. Te low corporate tax rate would apply only to operators who decide to establish a local company in Bulgaria.
From a regulatory perspective, the Bulgarian gaming regime is now one of the most balanced in Europe. It does not require a local establishment and main server in Bulgaria for any foreign operator who decides to obtain a local Bulgarian license (nevertheless, a local control server in Bulgaria is required). Tere are no specific requirements for performing payments through a local bank or to make certain investments in the country.
Te operators are not required to operate a dot bg domain. Foreign operators – registered, investing, and having a main server anywhere within EU, EEA, and Switzerland – can apply for
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a license. Nevertheless, the restrictions the Act imposes on an applicant whose shareholder is an offshore company should be carefully considered as effectively they are prevented from obtaining a licence in Bulgaria.
Te efforts of the Bulgarian Parliament are of major significance. Instead of concentrating on blocking measures (such as ISP and/or payment blocking), the government has focused on best practices and introduced regulations that motivate the online gambling operators to obtain a license and work not only in a balanced regulatory environment, but also under a favorable tax regime. Tese changes were aimed at balancing and optimising the sector’s regulation model that was introduced in 2012. Tey give the online operators promising conditions to work legally in the Bulgarian market. At the same time, the new regulations impose stricter administrative sanctions on illegal online gambling operations.
OPERATIONS IN SOFIA – PALMS MERKUR A joint partnership between Casino Technology
and the Gauselmann Group, the Palms Merkur casino chain has been a successful collaboration between the German gaming giant and the Bulgarian powerhouse. A deal was struck in 2006 to combine forces in Bulgaria to create a chain of slot halls/casinos that would build on the expertise of both companies, but also operate independently in terms of the products and services offered to local players.
“I would describe the market in Bulgaria as ‘a bit soft,’” say Anton Mihov, Executive Director, Palms Merkur Bulgaria. “Bulgarian players want to play for a little more time on device than other markets in Europe. High volatility games tend to bounce off this market, which is why many foreign manufacturers seeking to gain a foothold in this market have failed in the past, both in terms of supplying machines and operations. Multi-game machines featuring 40
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