Gabling laws in Bulgaria

  1.  Regulatory framework
    1. Is there a Gambling Act (or equivalent) in place?    
    2. Is online gambling a regulated activity?
    3. Are there any regulators?
    4. Is there a regulatory regime related to advertising gambling?
  2. Structuring and corporate governance
    1. Is a local presence necessary to run gambling activity?
    2. If yes, are there any mandatory legal forms of business for gambling companies?
    3. Can a local subsidiary be formed by foreign shareholders?
    4.  Are there foreign investment restrictions?
    5. Are there any minimum requirements for a gambling company’s statutory capital?
    6. Can management include foreign individuals?
    7.  Are there any mandatory reporting requirements (beyond tax) regarding a gambling company’s corporate governance matters?
  3. Licensing
    1. Do local regulations set out a clear licensing framework for gambling (including the licensing process, criteria, submission requirements, licensing conditions and ongoing compliance requirements)?
    2. Is gambling licensing specific to:
    3. Is the creation of video games for gambling by a software developer subject to gambling licensing?
    4. What is the term of a licence/permit?
    5. How long does it take to obtain a licence/permit?
    6. Is there any limit on the number of licences that can be granted?
    7.  Are there any specific licensing requirements?
  4.  Compliance
    1. Are there any mandatory AML rules generally and for gambling industry specifically?
    2.   Are there any specific reporting obligations for gambling companies in terms of AML and data protection?    
  5.  Data Protection 
    1.  Are there any specific Data Protection regulations in place?     
    2.  If yes, do they apply extra-territorially?     
    3.  Is there a Data Protection Regulator?     
  6.  Currency control and other cross border issues
    1.  Are there any currency/exchange/finance controls at the present time to transfer cash out of and into the country?     
    2.  Where currency/exchange/finance or capital controls do exist:
  7.  Marketing and advertising 
    1.  Is the advertising/marketing of gambling activity allowed in your country?  
    2.  Are there any advertising methods which cannot be used by gambling companies? 
    3. Can gambling companies be sponsors of sports events?
    4.   Is it allowed to involve celebrities to advertise gambling activities?
    5. Are there any CSR requirements for gambling companies?
    6. Are there any other restrictions/limitations on advertising gambling activities?
  8.  Tax 
    1. Is there any specific tax regime for gambling companies?    
    2.   Is there a tax implication for transferring cash out of the country?    
    3.   Is there a tax implication for transferring cash into the country?    
    4.   Is there a tax implication for offering trading activities remotely in the country?     
    5.  Are there any other observations regarding the taxation of gambling activities (locally and remotely)?     

1. Regulatory framework

1.1 Is there a Gambling Act (or equivalent) in place?    

Yes.

The Gambling Act, promulgated in State Gazette Issue 26 of 30 March 2012, as amended from time to time (the “Gambling Act”).

1.2 Is online gambling a regulated activity?

Yes.

Online gambling/betting services are regulated under the Gambling Act.

1.3 Are there any regulators?

Yes.

The National Revenue Agency.

Website: www.nra.bg

Yes.

Gambling advertising is a regulated activity in Bulgaria.

 

2. Structuring and corporate governance

2.1 Is a local presence necessary to run gambling activity?

No.

No, however, one of the requirements for operators is to have its registered seat in Bulgaria, another EU member state, member state to the EEA or the Swiss Confederation. 

Yes.

Sole traders are only allowed to organise activities related to the production, import, distribution and service of gaming equipment.

A licence for (i) organising gambling activities in a casino; and (ii) for games with slot machines, may be issued to a limited liability company or to a joint-stock company with registered shares.

2.3 Can a local subsidiary be formed by foreign shareholders?

Yes.

2.4 Are there foreign investment restrictions?

No.

2.5 Are there any minimum requirements for a gambling company’s statutory capital?

Yes.

From BGN 500,000 (ca. EUR 250,000) to BGN 1,500,000 (ca. EUR 750,000) depending on the gambling activity.

2.6 Can management include foreign individuals?

Yes.

2.7 Are there any mandatory reporting requirements (beyond tax) regarding a gambling company’s corporate governance matters?

Yes.

Licensed companies must submit documents to the National Revenue Agency evidencing minimum investments made, the amount of which depends on the type of licence received, within six months after receiving the licence.

 

3. Licensing

3.1 Do local regulations set out a clear licensing framework for gambling (including the licensing process, criteria, submission requirements, licensing conditions and ongoing compliance requirements)?

Yes.

3.2 Is gambling licensing specific to:

3.2.1 Betting?

Yes.

3.2.2 Sports?

Yes.

3.2.3 Skill games?

No.

Games of an entertaining or sporting nature, which require dexterity, knowledge and skills from the participants, and which do not rely primarily on chance, are not considered to be gambling.

3.2.4 Card Games?

No.

Card games (including online poker), which include the making of а wager, fall under the regime for licensing gambling games in a casino. 

3.2.5 Casinos?

Yes.

3.2.6 Lotteries?

Yes.

The types of lottery games are traditional lottery (to be conducted by the state-owned companies/organisations only), raffle, numerical lottery, and instant lottery.

3.2.7 Arcades?

No.

Entertainment machines do not require licensing. Entertainment machines are defined as technical devices for recreation and entertainment, demonstration of dexterity and skills, and those for knowledge-based purposes. Entertainment machines can give a prize in the form of an additional game, as well as a tangible prize of insignificant value. 

In contrast, slot machines are subject to licensing.

3.3 Is the creation of video games for gambling by a software developer subject to gambling licensing?

No.

3.4 What is the term of a licence/permit?

Up to ten years with five years being and average duration.  

3.5 How long does it take to obtain a licence/permit?

From two to four months.

3.6 Is there any limit on the number of licences that can be granted?

No.

3.7 Are there any specific licensing requirements?

Yes.

Please see section 2 above.

 

4. Compliance

4.1 Are there any mandatory AML rules generally and for gambling industry specifically?

Yes.

Licensed organisers of gambling games are obliged entities under the AML Act and as such they must comply with all measures under the AML Act.

4.2  Are there any specific reporting obligations for gambling companies in terms of AML and data protection?    

Yes.       

AML: common requirements under the AML Act.

Data protection: for online betting, the storage of all data related to the provision of gambling services (including the location of the local control server) should take place on Bulgarian territory. The National Revenue Agency and the State Agency for National Security should have permanent access to such servers.

 

5. Data Protection 

5.1 Are there any specific Data Protection regulations in place?     

Yes.         

General requirements under the Bulgarian Data Protection Act, which is the Bulgarian implementation of the GDPR. 

5.2 If yes, do they apply extra-territorially?     

Yes.        

The same territorial scope applies as per the GDPR. 

5.3 Is there a Data Protection Regulator?     

Yes.        

Bulgarian Personal Data Protection Commission.

Website: www.cpdp.bg

 

6. Currency control and other cross border issues

6.1 Are there any currency/exchange/finance controls at the present time to transfer cash out of and into the country?     

Yes.

General requirements under the Bulgarian Currency Act (the “CA”).

6.2 Where currency/exchange/finance or capital controls do exist:

6.2.1 What is the approval regime and process in place?

EUR 10,000 and more (or their equivalent in another currency) is a threshold at which an individual may be required to declare the respective amount depending on the route of funds.

6.2.2 Must permission be sought for each transaction, or can pre-approvals take place (subject to defined limitation, or otherwise)?

No pre-approvals available.

7. Marketing and advertising 

7.1 Is the advertising/marketing of gambling activity allowed in your country?  

Yes.         

7.2 Are there any advertising methods which cannot be used by gambling companies? 

Yes.   

The following is prohibited:

  1. direct advertising of gambling games;
  2. targeting minors;
  3. sending unsolicited electronic messages to an unlimited number of persons containing gambling information.

7.3 Can gambling companies be sponsors of sports events?

Yes.         

7.4  Is it allowed to involve celebrities to advertise gambling activities?

Yes.         

7.5 Are there any CSR requirements for gambling companies?

Yes.        

Gambling games organisers are obliged to make annual contributions for socially responsible behaviour for each issued licence in the following amounts:

  1. for online betting, ca. EUR 25,000;
  2. for games in a casino, ca. EUR 5,000;
  3. for all other gambling games, ca. EUR 2,500.

7.6 Are there any other restrictions/limitations on advertising gambling activities?

Yes.         

Legal entities and sole traders who publish, broadcast or distribute gambling advertising are obliged to comply with the National Ethical Rules for Advertising and Commercial Communication, which contain rules for the advertising of gambling games.

 

8. Tax 

8.1 Is there any specific tax regime for gambling companies?    

Yes.        

Online casino: 10% standard corporate tax flat.

Off-line casinos: a fixed tax per machine/seat/slot in specific games (roulette, slot machines, etc).

Gambling activities on games betting through the price of telephone or other telecommunication service at 15% flat on the mark-up of the telecommunication service price.

Sports/events betting, lotto, bingo, keno and similar games: 15% on the bets placed.

Commissions on organising gambling tournaments (e.g. poker): 20% on the commissions collected.

If the above gambling activities are based on-line, the charges are:

  • BGN 100,000 (ca. EUR 50,000) per annum plus 20% on the positive difference between the bets made by participants and profits paid for sports/events betting, lotto, bingo, keno and similar;
  • 20% on commissions collected for on organising gambling tournaments and events (e.g. poker).

8.2  Is there a tax implication for transferring cash out of the country?    

Yes.

The general regime related to dividends, return of capital, loan payments.

8.3  Is there a tax implication for transferring cash into the country?    

Yes.

Depending on the type of payment.

8.4  Is there a tax implication for offering trading activities remotely in the country?     

Yes.        

Depending on the local presence, permanent establishment may be created.

8.5 Are there any other observations regarding the taxation of gambling activities (locally and remotely)?     

Yes.

Tax and gambling fees are due depending on the specific licensed activities.

 

Find out more gambling regulation related to Bulgaria in the CMS Expert Guide to online regulation in Europe.

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Assen Georgiev
Partner
Sofia
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Nevena Radlova
Counsel
Sofia