Bulgaria as an online gambling services location27 February 2019
With over 15 years of history, Bulgaria is established in support services relating to online gambling, including software development at various levels of the value chain; technical and customer support and back office functions.
A range of mainly British, Gibraltarian and Israeli players run substantial Bulgarian operations (e.g., Ladbrokes, Playtech, Bwin.party, William Hill, SB Tech).
A strong outsourcing industry more generally provides the backdrop to online gambling support.
Bulgarian developers and support agents are generally seen as capable of high-quality output and possessing excellent intercultural skills. The timezone (UTC +2), places Bulgaria close in its working day to several large global markets.
Bulgaria generally ranks in the top tier for Internet speed and accessibility. The average connection speed in Bulgaria is 15,815 kbps, with average peak connection speeds of 59,048 kbps according to data from Akamai’s State of the Internet report. 4 Mbps broadband penetration reaches 96.8% and 15 Mbps broadband penetration at 40.2%. The advantageous Internet infrastructure makes it ideal to base servers or staff that remotely support the online gambling operators.
On the risks side, due to the smaller labour market, it might be harder to scale beyond a certain size particularly over a short period of time.
Bulgaria as an online gaming licensing base
The Bulgarian Gambling Act (most recently updated in 2014) allows the licensing of online gaming operators.
Substantial policy efforts have been invested in modernising legislation. The government has focused on adopting best practices and sought to lower the barriers to licences and create a balanced regulatory environment in a favourable tax regime.
For example, exchange betting specialist Betfair was granted two online gambling licenses by Bulgaria‘s State Gambling Commission (SGC) in 2014. Betfair is authorized to offer sports betting (including exchange wagering) as well as wagers on horse and dog racing. Betfair was also separately licensed for online casinos and poker.
The one-off government licensing fees one should consider are:
A one-time fee of BGN 100,000 (~ EUR 51,000) for your gaming licence
A per game licensing application fee of BGN 40,000 (~ EUR 20,000);
A licence issuance – BGN 20,000 (~ EUR 10,000) per game;
The periodic government fees include:
20% of the difference/spread between bets received and winnings paid out – payable monthly
Social responsibility fee of BGN 50,000 (~ EUR 25,000), payable annually.
An online gaming licensee may be a corporation established elsewhere in the EU (e.g., Malta). Once licensed, it may operate anywhere in the world subject to local laws and regulations.
In conclusion, Bulgaria may be an appropriate destination for online gambling operators.
Bulgaria’s gambling taxation regime together with the balanced regulations currently in place, makes the country attractive for local licensing and gambling operations based upon a low corporate tax and comparatively highly-qualified and low-priced technical specialists.