“New law, for the first time, includes provisions that regulate online gaming in Bulgaria”

What can you tell us about the final version of the Law on Gambling?
RMK: The new Bulgarian Gambling Law passed the final vote of the Bulgarian Parliament on March 15, 2012 and was published in The State Gazette on March 29, 2012. The new law will become effective as of July 01, 2012.  The Law for the first time includes provisions that regulate the online gaming market in Bulgaria, which is a major step ahead. This will allow any online operator to obtain a license and operate legally in the country.  Stricter licensing requirements as well as a new capital and investment requirements are provided for the gaming operators and manufacturers. The law includes a ban for direct advertising of gambling seeking to limit the exposure of minors to gaming activities. Many new texts were introduced that were designed to define better the existing forms of gaming and clear the ambiguity in some previous regulatory texts.

What will be the role of online gaming within the new regulated Bulgarian market?
AI: The regulation of online gaming activities is expected to establish consumer protection, position online gaming operators with a license as legitimate businesses, and bring more tax revenues to the Government. In the same time the land based operators will the synergy that online gaming could provide and seek to extend their customer reach either by operating their online casino or partnering with an online gaming operator. Legal online gaming and new technology will create new distribution channels and will create better opportunities for the players with bigger choice. This definitely will change the existing gaming market and push it to become more professional and competitive. In the same time operators will need to be very careful in order to keep up to the highest standards in the industry, to exercise care for consumer protection and seek to improve the social acceptance and image of the industry. 

What opportunities does this new law bring to gaming and casino systems manufactures?
RMK: Obviously the new law will provide a new market demand for products in the online gaming field and manufactures willing to position themselves in this new technology market will step in. Bulgaria has serious technology development companies, established already in the international gaming markets, like Casino Technology, EGT, and other and this will provide an opportunity for them to extend their portfolio and offer their game content and technology in the online gaming market in Bulgaria.

How will be affected land based operators by the new reality of online gaming in the country?
AI: We do expect some restructuring of the market. Operating a land based casino in a regulated online gaming environment will bring its challenges and operators will need to be flexible and adapt their business practices accordingly. We anticipate that some of them will apply for an online gaming license, while others will choose to stay only with land based casinos. The country at the moment offers enough opportunities for both land based and online operators, and the players demand, habits, relationships, will not change overnight.  We expect that online gaming will create a new, younger customer base that will widen the overall gaming opportunities and business.
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How is positioned Bulgaria regarding other European gambling markets?
AI: Bulgaria is relatively old gaming market. First gaming regulation was enacted in 1993 and since the market developed in a positive and more professional direction in terms of regulation and business operations. Unfortunately the recession led to some shrinkage of the market and the increase of the gaming tax 2 years ago had its good share in pushing the business to a standstill position. Currently, a total smoking ban is undergoing discussion in the Parliament and can further affect the casino revenues if no exemption for casinos and gambling establishments is provided.

In your opinion, what is the weakness of the Bulgarian gaming market?
RMK: High tax levy on gambling activities can be destructive for the business. Two years ago we had an increase in the gambling taxes and this did not help the industry recover from the economic downturn. We hope that the government can assess and carefully balance the tax levy in order to maintain the thin line in the tax stakes to manage healthy business environment that bring good tax revenue for the budget.

And what is the growth potential of Bulgaria?
AI: Bulgaria is very well positioned both as geostrategic ally that provides great opportunities for tourism and business and as of this moment from macroeconomic point of view. Bulgaria has one of the lowest Foreign Debt to GDP ratio and offers attractive investment climate with a Corporate Tax of 10 %. The trade balance of the country was positive last year and these factors raise the hope for growth. So the overall potential of the country exists and it is a matter of government vision and policy to lead the country to a further growth and better positioning.

Is the government planning to announce new measures concerning gaming?
RMK: We expect perhaps certain tax amendments that will define the online gambling taxation.  We know that any living regulation changes and develops, especially in the era of fast technology developments. We would like to see the Bulgarian governmental vision about the industry that can increase the role of gaming activities for the Bulgarian economy and develop it more closely with the tourist sector as an added value to the complex tourist product.