We detail below certain legal requirements to online gambling licences in Bulgaria.
- Background
The Bulgarian Gambling Act 2012 (GA) and its implementing legislation regulate Bulgarian online gambling. Remote gambling was first legislated for in 2014, and has been subjected to incremental change only since.
Except for the recent move of regulatory powers from a standalone regulator (the State Gambling Commission) to the tax authorities (National Revenue Agency), the regulation of online gambling in Bulgaria has been stable.
The Gambling Act defines “online gambling” as any game of chance in which players bet directly using the internet or other electronic means of communication.
Bulgarian law allows licensing various types of online games, including betting, poker and casino games. However, except for instant lotteries, following amendments to the GA made in February 2021, online lotteries are a state monopoly.
Although Bulgaria has been an EU member state since 2007, the gambling sector is partly exempt from otherwise universal EU laws and there is no gambling-specific EU law. Member states, including Bulgaria, are autonomous in regulating gambling.
- Requirements for online gambling organisers
Only a licensed company may organise online gambling in Bulgaria. The government authority which reviews applications and issues gambling licences is the National Revenue Agency (NRA).
Depending on the intended scope of business, before applying, both the general and game-specific licensing requirements must be reviewed.
The general requirements for obtaining a gambling licence are as follows:
- The applicant must be an EU-registered company (eg, Gibraltar no longer qualifies);
- Capital – the applicant company must have at least BGN 1.5 m (approx. € 767,000) of paid-in share capital;
- Authorised representative – if the company is not Bulgarian, it must nominate an authorised representative in Bulgaria;
- Reliability – the applicant must not have been found in breach of the Gambling Act at any time (eg, have had its licence revoked; had its directors or majority shareholders subjected to criminal proceedings; etc).
- Gaming equipment – the applicant must have certain computer systems and networks, software, etc. Its “central computer systems” must be in the EU;
- Bank account in an EU bank “operating in Bulgaria” – for depositing bets and payment of prizes. In practice, this may mean that the bank must be one of the licensed banks operating in Bulgaria, rather than elsewhere in the EU;
- Connectivity – the central computer systems must be able to register and identify the players and be connected to the servers of the National Revenue Agency to provide real-time information on the games played, the bets made and the prizes paid;
- Approval by the NRA – the gaming software and any updates must be approved by the NRA;
- Investments – post-approval, the applicant must invest BGN 1 m (approx. € 511,000) within 6 months of licensing.
The special requirements are game-specific (eg, relating only to online poker, there are requirements as to the computer system used, the website, the rules and others). They must therefore be carefully reviewed on a case-by-cases basis.
- Application Process
The application is to be supported by a set of documents (eg, certificates of good standing; criminal record checks; UBO information; various declarations; information on the source of funds; rules for playing the gambling games; internal rules and procedures; KYC and AML internal regulations; website information; information on the gaming equipment; payment documents; etc).
The government fees for application review range from approx. € 5,000 to € 20,000 (eg, for online sports betting licences, the government fee is BGN 20,000 (approx. € 10,220)). Additional documents may be required.
Application review takes between 60 and 90 days. After review, the NRA Director approves or rejects the licence application. Any rejection is appealable before the Sofia Administrative Court.
The licence usually lasts for 5 years.
On approval, an additional post-approval licence fee is payable.
- Tax
Bulgarian online gambling is taxed only through corporate tax on the taxable profit from online gambling, at the rate of 10%. Various cross-border tax matters may also arise.
- Certain post-licensing requirements
Compliance with the below requirements is required for continued licensing.
Preparation for ongoing compliance
For both ongoing compliance and initial licensing purposes, online gambling operators need also to comply with domestic law. This includes: advertising regulation, the consumer protection, data protection, AML and others.
To ensure compliance may require preparing internal rules, policies and procedures; contractual templates; general terms and conditions; approval and appointment of the relevant authorised individuals who will act in key compliance-required roles (Key Persons).
Commercial relationships with suppliers
The licensed applicant may be required to enter into supply and service agreements (e.g., SLAs) with software suppliers.
Employment
Employment related issues also may arise, including compliance with confidentiality and other clauses of significance to the activity of the licensed applicant both in relation to Key Persons and any other employees or consultants.
