Bulgaria okays private lottery ban, regulator issues tax warning


bulgaria-bans-private-lotteries-gambling-tax-warningBulgaria’s parliament has approved legislation banning private lotteries while the country’s gambling regulator has issued a warning regarding its licensees’ tax obligations.

On Friday, Bulgaria’s parliament approved the second reading of legislation that amends the country’s Gambling Act to ban private lottery operators. The bill is expected to be published in the State Gazette next week, after which it will officially take effect.

Once enacted, all lottery games not operated by the state-run Bulgarian Sports Totalizator must cease their operations within 90 days. The new rules don’t apply to state-licensed private operators offering sports betting (land-based or online), slot machines, raffles, bingo or keno. A proposal to ban all gambling advertising failed to garner enough support and was not adopted.

The bill was crafted after the government concluded that private lottery operators had underpaid their taxes to the tune of US$118m over the past six years. This led to last month’s indictment of Vasil Bozhkov, the nation’s largest private gambling operator, who was arrested in the United Arab Emirates this week and is currently awaiting extradition.

Bozhkov’s indictments were accompanied by raids on the offices of the country’s Gambling Commission and the arrest of the regulator’s chairman Alexander Georgiev, who has since been released on bail after confessing to taking steps to favor Bozhkov’s operations.

A former Ministry of Finance official was appointed as the temporary head of the Commission, which has also received four new directors as the government does some housecleaning of the scandal-tainted regulatory body.

On Wednesday, the Commission issued a statement saying that the State Financial Inspection Agency had discovered “irregularities in the calculation and payment” of gambling fees. Specifically, the Commission said not all of its gambling licensees were remitting the correct percentage of their sales.

The Commission reminded licensees that most forms of land-based gambling carry a 15% tax on operator revenue, while online gambling and land-based poker are subject to a 20% tax. The Commission warned that failure to remit the correct sums will result in minimum financial penalties of BGN5k (US$2,800) and (presumably) a prison cell next to Bozhkov’s.