Bulgaria Rejects Proposals to Increase Gambling Taxes

The Bulgarian government has rejected opposition demands to increase gambling taxes and drastically restrict advertising in this sector, even acknowledging that the country's channeling is only 60%. This week, Parliament debated the growing interest in illegal gambling, and amendments to the current regulation were proposed. Although minor additional taxes focused on a specific niche were approved, broader measures aimed at nearly doubling operator fees and banning advertising were rejected.

Currently, the online gambling tax in Bulgaria stands at 25% on Gross Gaming Revenue (GGR) plus a 10% corporate tax, increased from 20% earlier this year.

Government Warnings About Rapid Tax Increases

The Deputy Minister of Finance, Lyudmila Petkova, warned the budget committee that raising taxes could drive more players towards unregulated and illegal platforms. While increasing the gambling tax might seem beneficial, this measure risks shifting players from the legal market to the black market if the gray market is not controlled first.

"Yes, the proposal to increase [taxes] sounds good, but any increase without measures to limit the gray sector means shifting players from the legal market to the illegal one," stated Petkova.

Additionally, she revealed that the Ministry of Finance was preparing a comprehensive review of gambling legislation in Bulgaria.

Opposition Criticisms

The opposition parties "We Continue the Change" and "Democratic Bulgaria" criticized the government for what they see as lenient attitudes toward gambling promotion and insufficient action against illegal operators. Venko Sabutev, a prominent opposition MP, expressed frustration at the refusal to amend the Gambling Law through transitional provisions in the parliamentary process.

"How could they change the Labor Code through transitional and final provisions, but cannot change the Gambling Law and stop gambling advertising using the same mechanism?" Sabutev demanded.

Current Restrictions on Advertising

On April 30, 2024, the Bulgarian Parliament approved amendments that banned gambling advertising on television, radio, print media, and digital platforms, with limited exceptions for the state-owned Bulgarian Sports Totalizator. While advertising was permitted on billboards, it had to be located at least 300 meters away from schools, universities, and parks, dedicating at least 10% of the space to warnings about gambling dangers.

Advertising on buildings offering gaming services was also strictly controlled, allowing no more than 50 square meters or 20% of the facade for advertisements.

According to Mark Chakravarti, investment director of the local operator Sportingwin, the advertising ban led to a significant drop in revenues for operators operating in Bulgaria.

"Global research shows that when these bans are implemented, especially limiting television commercials, revenues fall by 20% in the following two months," Chakravarti told iGB in October 2024. "I believe it has been very similar in the Bulgarian market."

Future Prospects

Bulgaria's approach to gambling regulation remains a hot topic, with ongoing debates about how to balance taxes and regulation without driving the illegal market. The Ministry of Finance is working on the task of reviewing its legislation to handle this ever-evolving challenge.