Bulgaria is halving its proposed online gaming tax after the government realised no foreign operators would apply for licences if the rate remained at 15% of stakes.
The country’s parliament in March approved a bill that would require all Bulgarian and foreign online gambling operators to be licensed and regulated by the country’s State Gambling Commission. However, as reported by Casino Choice at the time, the tax rate in the bill was set at 15% of operator turnover, twice the level of the tax which has crippled the development of the regulated online sports betting market in France.
However, a source from the ruling party Citizens for European Development of Bulgaria (CEDB) told the Focus news agency yesterday that the tax would cut to around 6% to 8% because a tax rate of 15% would make it impossible for operators to build a profitable business in the territory if they were returning more than 95% of sports betting stakes to players.
“Thus no foreign operator would come to Bulgaria”, a source from the Parliamentary Budget and Finance Committee explained to the news agency.
Under the legislation passed in March, any gambling web doman not registered with the State Gambling Commission will be placed on a blacklist of illegal sites, with Internet Service Providers (ISP) facing prosecution and fines of up to £8,500 if they fail to block Bulgarian players’ access to sites on the blacklist.
Players will also have to register before they’re allowed to partake in online sports betting, casino games and poker. Bulgarian MPs are also discussing the implementation of strict rules regarding exactly where advertising gambling can take place in the country.
According to politicians from the CEDB at the time the legislation was passed in March, the new licensing and regulatory regime would bring in around €50m in additonal annual tax revenue.
The online gambling market in Eastern Europe remains largely unregulated in countries where the websites are accessed by consumers, with most operators licensed in low-tax jurisdictions within the European Economic Area. Operators’ right under Articles 56 and 49 of the EU Treaty to freely offer online gambling into Member States from jurisdictions within the EEA has however been eroded by a series of recent ECJ decisions. These legal precedents have supported the establishment of dot.country licensing and tax regimes for online gambling in Italy, France and Denmark.
The stupidity of politicians never ceases to amaze me.