Bulgaria’s Gambling Market Worth Nearly $2 Billion in 2017

Bulgaria-facing gambling operators generated the total amount of BGN3 billion (approximately $1.9 billion) in revenue in 2017, local media reports. The local gambling market more than doubled from a decade ago, following the introduction of revised gambling regulations in 2013.

Scratchcards maintained their growth momentum and were once again the highest grossing segment within Bulgaria’s gambling industry. This type of product began gaining widespread popularity in the Southeast European country several years ago. Scratchcards quickly became the market leader through aggressive marketing on different media outlets and due to the fact that many dp not perceive it as a form of gambling.

While there is still no information about the revenue generated from scratchcards in 2017, it should be noted that that particular segment produced revenue of around BGN320 million in 2016, up nearly 30% year-on-year. National Lottery and Lottery Bulgaria are known to be the largest scratchcard sellers in the country. Both companies are owned by Bulgarian businessman Vasil Bozhkov, one of the country’s richest men who has often appeared in local media for alleged criminal ties.

As many as 1,327 companies are licensed to operate gambling services in Bulgaria, both remotely and at land-based facilities. However, recent data shows that although the country’s gambling market seems to be growing rapidly, licensed operators have been slammed by industry critics for contributing to the nation’s coffers just a minuscule portion of what they generate annually.

No Corporate Tax

According to official data, licensed gambling operators paid the amount of BGN177 million in taxes to the country in 2016. In 2017, gambling taxes totaled BGN144 million during the first nine months of the year.

The Bulgarian government has previously introduced tax breaks for companies operating in the country’s gambling field to encourage investment. Licensed operators are thus not paying a corporate tax and are instead subjected to an alternative tax.

It is also important to note that the country taxes operators of different gambling services in a different manner. Land-based gaming facilities pay taxes depending on the number of gaming devices they feature.

Remote gambling operators are taxed at 20% on gambling revenue. They are also required to pay a one-off licensing fee of BGN100,000. Online gambling companies were previously taxed at 15% on their turnover, but the tax base was changed with the re-regulation of the local market in 2013.

The growth of the local gambling industry has been met with growing criticism and concerns over the impact gaming and betting activities have on population. According to local media reports at least 40% of the country’s residents have engaged in what has been described as a soft form of gambling. And the rate of people engaging in gambling activities of different nature, including online gaming and betting and scratchcards, has been rising just as rapidly as the market has been growing over the past several years.

Under the country’s regulations, licensed gambling operators are required to contribute funds to responsible gambling initiatives and organizations tasked with the treatment of people suffering from gambling addiction. In 2016, the amount of BGN2 million was contributed to responsible gambling causes. However, it should be noted that an industry worth several billion Bulgarian leva probably needs to be more generous toward initiatives related to the prevention of societal issues.

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