The Nation of Bulgaria has recently undergone a complete revamp of its fee structure for gambling operators, introducing a two to four-fold increase in existing charges. This move is projected to generate an additional income of approximately BGN 200 million ($112.62 million) for government coffers. This significant amendment has been incorporated into the concluding clauses of the 2024 State Budget Law. Notwithstanding a series of intense debates involving the controversial Revival Party, the proposal gained substantial support.
Voicing of Concerns by Industry Representatives
The overhauled fees, enacted during a specialized budget committee assembly on Sunday, evoked varied reactions. Supporters, such as Parliament Member Petar Petrov, validate the fee surge, emphasizing the importance of providing a fair operational environment for all operators. He expressed concerns that the preceding licensing structure was fraught with disparity and called for unanimity in regulatory frameworks.
Critics of the significant fee ascension, however, express trepidation about the potential deleterious effects of surging costs on administrative obligations, such as licensing processes. Despite conceding the necessity for revised fees, they recommend a more deliberate and strategic methodology. As per AGIB’s analysis, the revised taxation appears excessive and may render some operators’ business models impracticable.
In response to these apprehensions, Finance Minister Assen Vassilev justified the legislative decision. He maintained that all gambling operators were equal before the law, and the timing of their market inauguration should not affect licensing charges. Drawing a parallel with the tobacco industry, he stated that it was within the state’s authority to modify tariffs based on prevailing economic conditions.
Significant Increases Expected Across Most Verticals
The recent enactments propose a comprehensive fee architecture. For example, the new rules stipulate a basic tax of BGN 300,000 ($169,000), plus an additional 20% changeable levy based on payout rates for five-year gambling licenses, with the exception of online betting. The revamped regulations also delineate differing charges for gaming machine licenses, contingent on local populace density.
Conversely, games reliant on entry fees and commissions will be subject to a 20% tax on their revenues. In a last-minute move, a legislative alteration was approved, introducing fines ranging from BGN 5,000 ($2,800) to BGN 10,000 ($5,600) for undeclared gaming activity. These modifications will take effect from 1 January 2024, affording operators slight leeway and ruling out the prospects of any significant revisions.
The enforcement of these fee escalations underpins Bulgaria’s strategic reassessment of its gambling sector, aiming to forge a fairer industry landscape while concurrently augmenting state income. Nevertheless, the differing viewpoints and concerns underscore the persisting debates over the repercussions of such regulatory interventions on operators and the long-term viability of the industry.
