© New Balkans Law Office 2019

New Balkans Law Office: Bulgarian Lawyers

Bulgaria as an online gambling services location

Bulgaria's online gambling industry

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.

Operators are charged a one-off licensing fee of approximately US$ 56,000 plus 20% on the difference between the value of the bets received and the winnings paid out, except that games which involve the collection (by the operator) of a commission or a fee for participation are instead charged a fee of 20% on the value of such commissions or fees collected.

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

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.

Bulgarian Sports Legal News

The Act for the Amendment and Supplementation of the Bulgarian Physical Education and Sports Act (PESA), enacted on the 7 December 2010, introduces a new Article 50 (d) (ie, “г” in the Cyrillic alphabet) into the statute it amends. The new provision creates a new legal category – the gratuitously granted right to build on real estate held by the state or a municipality (except for real estate expressly reserved by law for state ownership).
The beneficiaries of this species of right may only be sports federations, and the right permits only the construction of sport buildings and/or facilities. The right to build can be of no greater than 30 years’ duration. To take advantage of the right, a sports federation needs to meet the requirements in para. 2 of article 50(g)(ie, “г”). The beneficiary would need to complete construction and obtain a usage permit for the structure and/or facility within 5 years of the grant of the right.
Although the right is granted free of charge, all planning, design, construction and usage permit application costs have to be borne by the sports federation. The sports federation is not entitled to transfer the right to build in any way whatsoever and may not dispose of the building and/or facility during the duration of the right to build. The right to build cannot be used to secure the contractual obligations of the federation or third parties either (which is a less understandable restriction which surely minimises the range of efficient uses which the beneficiary could make). The beneficiary must cover the costs of reversion of title to the state or municipality on the termination of the contract establishing the right to build.
It remains to be seen to what extent this will permit an optimisation of financing arrangements for sports facilities, but it would certainly be capable of assisting those sports federations which are able to mobilise state support in order to make lawful arrangements where they would not otherwise be able to.
Another interesting amendment to PESA in 2010 was the new para. 3 in Article 35 (d) (“e” in the Bulgarian text). According to it, a sportsman or woman may now be represented by a range of other agents (including an attorney-at-law, parent or spouse) in negotiations over transfer rights, while previously such representation was only permitted to a registered specialist intermediary.
Given the large number of practising Bulgarian attorneys in particular, we fully expect this to have a liberating effect on the local transfer marketplace, as well as on some outbound transfers.
Follow-up edit: Capital has just published a Special Report on sports infrastructure and sports property development (in Bulgarian only).

Recent work:

Assistance in local set-ups to blue chips

We have also been involved in advising a wide range of clients on establishing their business operations in Bulgaria.

© New Balkans Law Office 2019