Bulgaria Introduces Drastic Fee Hikes for Gambling Operators

Bulgaria has finalized an overhaul of fees for gambling operators, increasing costs between two and four times. These measures should bring in roughly BGN 200 million ($112.62 million) in additional revenue for the government. This amendment, integrated into the final provisions of the 2024 State Budget Law, garnered support after significant deliberations involving the country’s controversial Revival Party.

Industry Representatives Expressed Concerns

The revised fees, adopted during a special budget committee meeting on Sunday, have drawn mixed responses. Proponents, such as MP Petar Petrov, advocate for fee hikes, highlighting the need to create a level playing field for operators. He underlined concerns about the previous licensing structure creating unequal conditions and emphasized the need for consistency in regulatory frameworks.

Opponents of the substantial fee increases worry about the potential adverse impact of inflated costs on administrative burdens like licensing procedures. Though they acknowledge the need for updated fees, their stance advocates a more strategic and considerate approach. According to the AGIB, the new taxes are disproportionate and could make some operators’ businesses unsustainable.

Finance Minister Assen Vassilev addressed these concerns, defending the parliament’s decision. He noted that gambling operators were equal before the law, and the timing of their market entry should not impact licensing fees. He compared the gambling sector to the tobacco industry, noting that the state had the right to adjust tariffs to reflect economic realities.

Most Verticals Will See Substantial Increases

The newly adopted texts envision a multifaceted fee structure. For instance, five-year licenses for gambling activities, excluding online betting, will now have a fixed levy of BGN 300,000 ($169,000) and an additional 20% variable levy based on payout percentages. The revised regulations also set different fees for gaming machine licenses based on local population density.

Games that rely on participation fees and commissions will instead pay a 20% tax on their income. Additionally, legislators sanctioned a last-minute amendment introducing sanctions ranging from BGN 5,000 ($2,800) to BGN 10,000 ($5,600) for undeclared gaming activity. These changes become effective on 1 January 2024, giving operators little time to prepare and eliminating the possibility of any significant revisions.

The implemented fee hikes underscore Bulgaria’s strategic revaluation of its gambling industry, aiming for a more equitable landscape while concurrently boosting state revenues. However, the divisive opinions and concerns highlight ongoing debates regarding the impact of such regulatory measures on operators and the industry’s overall sustainability.