Bulgaria, officially known as the Republic of Bulgaria, is a smaller Eastern European country where gambling has started to grow exponentially in popularity during the last few years. Gambling has been legal in the country ever since 1957 but it took the country quite a few years until it properly regulated the industry.
Nowadays, both land-based and online forms of gambling are legal in Bulgaria, with operators who wish to offer casino or sportsbook betting being required to obtain a license. As online gambling is getting more popular in the country, the industry keeps expanding, with this becoming the favorite pastime of both Bulgarian men and women.
Since Bulgaria is a member of the EU, the country’s legislative system is compliant with most of the laws enacted by the union, especially with the Freedom of Establishment and the Freedom to Provide Services in the EU. In addition to the EU laws, the Bulgarian legislative system has also adopted several laws that regulate the gambling businesses in the country and the way they are supposed to be provided.
To protect players and ensure a safer gambling environment, the Bulgarian government takes extra measures to prevent unlicensed gambling. Online operators that have not been authorized by Bulgarian authorities are often blacklisted while access to foreign unlicensed online operators is also often blocked.
History of Gambling in Bulgaria
Throughout the 19th century, gambling was illegal in Bulgaria, with the main reason for the country to outlaw gambling was the government’s inability to handle the rapidly growing gambling-related debts in the country. After gambling was prohibited at the end of the 19th century, the form of gambling hat that was allowed to operate in Bulgaria was the State cash and goods lottery.
Despite the ban on gambling, it did not cease to exist in the country with playing cards, backgammon, and barbooth being some of the games that many enjoyed up until the middle of the 20th century. It was also common to see slot machines at some restaurants, further implementing the idea that gambling was not that inaccessible.
The change towards legal gambling in Bulgaria was taken in 1957 when the Sports Toto was established. Meanwhile, in the ‘70s, casinos, gambling halls, as well as lottery games, became more accessible in Bulgaria. While various forms of gambling have become more common in Bulgaria towards the end of the 20th century, this industry remained vastly unregulated during that period.
The first bill that actually introduced real regulations on gambling in Bulgaria was proposed in 1993. This was during the period of the democratization of the country when the legislative system of Bulgaria went through various changes. The first Gaming Law was enacted in 1998 and a decade later, online gambling was also legalized in Bulgaria.
The gambling scene in Bulgaria has its shortcomings, many of which are related to the dark past of unlawful gambling in the past. That said, the current regulations are aiming to ensure a safer gambling environment for both offline and online players.
Gambling Regulations in Bulgaria
As mentioned above, the legal gambling operations in Bulgaria started in 1957 with the launch of the Sports Toto. Even though casino games, gaming halls, and lotteries have also become widely popular, none of them was properly regulated until the ‘90s. The first time gambling regulation was considered in Bulgaria was in 1993 when the first regulatory document was introduced by the then government. Ordinance On The Terms And Conditions For Issuance Of Permits For Organization Of Gambling Games was enacted that year and allowed the operations of the state lottery, casinos, and bingo halls.
The first Gaming Law of Bulgaria was passed in 1998, five years after the aforementioned ordinance. Since then, this law has been amended several times, fitting the evolving gambling scene in the country. In present days, the gambling industry in Bulgaria is regulated by the Gambling Law amended in 2012. Under that law, gambling is defined as any game of chance that is played with a bet that can either be lost or won.
With the enactment of the Gambling Law, the country set up better regulations for the operations of casinos and gambling halls. The new law also established the licensing system, the regulatory body, and its specific responsibilities. Thanks to the Gambling Law, new gambling taxes were also introduced and there were some amendments concerning the gaming equipment requirements. Prior to the enactment of the Gambling Law in 1998, there were some restrictions on the maximum amount of winnings that could have been paid out. With the new Gambling Law, these limitations were revoked.
According to the Gambling Law, organizations that provide online gambling operations without having the license to do so will face a penalty of a fine between BGN 1 million and BGN 2 million. If the organization is operating a land-based gambling facility without a proper license, the fine imposed ranges between BGN 50,000 and BGN 200,000. Individuals who illegally manufactured, imported, distributed, or repaired gaming equipment will face a penalty of a fine between BGN 20,000 and BGN 50,000. If the same type of illegal activities involving gaming equipment is provided by an unlicensed organization, the imposed fine will range between BGN 50,000 and BGN 200,000.
Under the Gambling Law, the minimum legal age for gambling in Bulgaria is 18 years. The Bulgarian gambling legislation has been constituted to ensure a safe gambling environment. With the latest amendment of the Gambling Law in 2012, Bulgaria imposed a pretty good regulatory system which has been operating successfully for e decade now. What is more, as a member of the EU, Bulgaria is also compliant with the anti-money laundering policy of the EU.
Gambling Regulator and Gambling Licenses in Bulgaria
The gambling industry in Bulgaria used to be regulated by the State Commission on Gambling. This was also the authority that was responsible for issuing licenses to gambling operators in the country. In 2020, however, the Gambling Commission’s chairman, Alexander Georgiev, and the owner of some of the biggest casinos, slot halls, and online casinos in Bulgaria, Vasil Bozhkov were involved in a corruption scandal.
Since the Gambling Commission’s integrity was compromised, the Government of Bulgaria decided to cease the operation of the regulatory body and transfer its responsibilities to the National Revenue Agency. The new regulatory body was introduced with the latest amendment of the Gambling Law in August 2020. Currently, the agency regulates the entire gambling industry in the country, and issuing and revoking gambling licenses also falls under its remit. Online casino licenses are also issued by the National Revenue Agency and detailed information on licensing requirements can be found on the regulatory body’s official website.
To be able to apply for a gambling license in Bulgaria, operators must meet the following conditions:
- While it is not necessary for the applicant country to be based in Bulgaria, it must be in a country member of the EU
- The required capital to apply for a gambling license in Bulgaria is BGN 1.5 million (approximately $1 million, €780,000)
- The company applying for a license must not have breached any of the rules imposed by the Gambling Law
- Only casino operators with servers physically based in an EU country will be allowed to apply for a license
- The bank accounts of the company must be operated by EU banks that are also present in Bulgaria
- The central computer systems of the casino must be connected to the National Revenue Agency servers so the regulator can receive real-time information on wagers, games being played, and the prizes being paid
- The National Revenue Agency must also approve the gaming software used by the operator as well as any updates to the software
- After applicants are approved for a gaming license, they must invest BGN 1 million (approximately €511,000) in the following six months
- The National Revenue Agency must be informed about the sources of the funds to be invested
There are also additional requirements that one could read about on the official website of the regulatory body, which is available in Bulgarian and English. The license fee may range somewhere between €5,000 and €50,000, depending on the type of service that will be provided.
Gambling Related Tax in Bulgaria
While players are not required to pay any taxes on winnings they have earned through gambling, operators offering gambling services are obligated to pay taxes and even additional gambling fees. Gambling activities in Bulgaria are taxed under Art.219 through 247 of the Corporate Income Tax Act. Gambling tax is levied on gambling operators that provide games that require players to place wagers by paying the price through a mobile device or another type of electronic communications device. In such cases, the tax rate that is applied is 15% of the price paid through the mobile or another type of electronic communication device.
Gambling taxes are also levied on slot machines and other casino games offered at land-based gambling facilities. The tax rate may be different depending on the type of casino games that is offered and whether it is offered at a brick-and-mortar casino or a gaming hall. In addition to the aforementioned tax of 15%, there is also an additional fee that must be paid on certain games on a quarterly basis. Facilities operating roulette tables must pay BGN 22,000 per roulette table. Meanwhile, other casino equipment requires a fee of BGN 5,000 per single piece of equipment. Gaming halls operating slot machines will also need to pay an additional fee of BGN 500 per single slot machine or terminal/seat in the gaming hall.
Online gaming operators are required to pay a higher tax of 20%. It is levied on the gross gaming revenue generated from the virtual casino.
While gambling was not properly regulated in Bulgaria until 2012, the country managed to establish a rather effective legislative system in the following years. All forms of gambling are regulated and legal in Bulgaria, with the country imposing different measures to ensure a safe and fair gambling environment. The main piece of legislation regulating gambling in Bulgaria is the Gambling Law of 2012. To fit the constantly evolving gambling scene in the country, the law has gone through several amendments.
Under the Gambling Law, operators that wish to provide land-based gambling services in Bulgaria must obtain a license from the National Revenue Agency. The same authority also issues licenses to operators who want to legally offer online gaming and betting services to Bulgarians. In addition to issuing gaming licenses, the National Revenue Agency is also the authority regulating the gambling industry in the country.
While there have been some scandals surrounding the gambling sector in Bulgaria, the government took the required measures to ensure better regulation of the industry. With a new regulatory and licensing body in the face of the National Revenue Agency, the country is hoping to provide a safer and fairer gambling industry for Bulgarian players and bettors.
With online gambling being legal in Bulgaria, we see more operators joining the Bulgarian online gambling market. As more people find online gaming and betting more convenient, this sector is expected to continue to grow and hopefully help the growth of the country’s economy.