GW08-p05-news:Layout 1 21/12/09 17:09 Page 1
Markets | Bulgaria
Bulgaria
Clouds gather over
ANALYSIS
Bulgarian gaming industry
According to Finance Min-
istry calculations, the
three percentage point
increase in gaming tax
would bring a further
BGN18m ($13.7m) to Bul-
garia’s budget every year.
Yet this figure pales into
insignificance when com-
pared to the BGN134m
($101.8m) in taxes that
would be lost as the result
of mass unemployment
brought about by the
country’s shrinking
gaming sector.
The move will almost
certainly serve to bank-
rupt hundreds of Bul-
garia’s independent
operators that are
already struggling amid
the downturn, adding to
the 60 licences that have
been cancelled this year
alone.
As an alternative to this
action, industry
observers have sug-
gested legislators should
raise revenue collection
from the gambling indus-
try by concentrating on
better regulation of the
country’s burgeoning
online gambling sector,
which could add as much
as BGN160m ($121.7m)
more to the state coffers
every year.
t started in Russia.
I
Towards the end of Having only just started to dust itself off from the downturn, the Bulgarian government has
2008 it was becom-
dealt a potentially fatal blow to its gaming industry. James Walker reports.
ing increasingly
clear that the State
Duma would not rescind its As with Russia, Ukraine and Prime Minister Byoko Borisov and not on net profit, even a suffer in economic recession
decision to banish gaming to Poland, supporters of the said the tax presented an alter- small increase in the percent- periods is broken.”
the far reaches of the federation. move say the actions were nec- native to a proposed increase age may lead to huge fluctua- Since its ascension to the EU
Ukraine soon followed suit, and essary to bring under control on liquor taxes. tions in the final financial in 2007, Bulgaria has become
severe gaming restrictions in spiralling addiction, but critics Regardless, it has been esti- result. This increase in gaming renowned for its transparent
both countries were in place by say the decision will simply mated that the move places the tax made in the middle of the gaming laws. The BTAMOGI
July 1 this year. Now, following drive the industry under- jobs of nearly half of Bulgaria’s global economic recession is continues to operate along this
subsequent rumours that the ground. 80,000 gaming employees in an extreme measure that may principle, and the group was
Polish government is looking to The situation does not end jeopardy. Amid the worst finan- lead to the bankruptcy of many quick to organise an open
phase out 50,000 AWP here: quarterly tax on gam- cial downturn since the 1930s, operators and most likely to a round table discussion
Angel Iribozov: “It is
machines and effectively ban bling machines and roulette this makes for grim reading. reduction of the tax incomes between key industry repre-
obvious that gaming
gambling in the country out- tables will also be increased as Even more disparaging, for the state.” sentatives in the wake of the
experts have been not
right, the Bulgarian Parliament of January 1. Currently, gam- however, is the fact that the loss Iribozov added: “As it is well announcement.
included in the drafting”
voted to make a significant bling machines are taxed of 40,000 jobs in the sector known, the tax increase will However, this transparency
amendment to its Corporate BGN300 ($228) every three would translate into a loss of not definitely lead to an does not seem to be reflected and prescribing of even more
Income Taxation Act. months, but this will rise sub- BGN134m ($101.8m) in indi- increase in state treasury elsewhere in the Balkan state. stricter control to the licensee,
As of 2010, all gambling stantially to BGN500 ($380). rect taxes for the state budget. income. Even at the current On November 4, Iane Ianev, the draft law has a lot of ambi-
activities in the Balkan country The reasoning behind the Speaking exclusively to levels of gaming taxation in leader of political party Order, guities and lapses,” Iribozov
- street gaming, bingo, casino hikes has been varied. Democ- Games World, Angel Iribozov, Bulgaria, more than 60 gaming Lawfulness, Justice, submitted stated. “It is obvious that
gaming, lotteries and sports rats for Strong Bulgaria leader chairman of the management licences have been terminated for approval a draft proposal gaming experts have not been
betting - will be subject to a flat Ivan Kostrov said it was “not board for the Bulgarian Trade as a result of the economic for amendments of the gaming included in its drafting, and
tax rate of 15 per cent. Sports normal” for the poorest Association of Manufacturers recession since the beginning law that are now in force. very important issues have not
betting is currently taxed at 10 country in the European and Operators in the Gaming of 2009. It is obvious that in Bul- “Despite some of the posi- been raised, such as the protec-
per cent, while games of Union to have the most liberal Industry, said: “As the tax con- garia, as all over the world, the tive issues it reflects, such as tion of minors in technical
chance are taxed at 12 per cent. gambling regime, whereas sidered is on the gross revenue myth that gaming doesn’t regulation of online gaming compliance requirements.”
Games World | 5 | December 2009/January 2010
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