Bulgaria Rejects Gambling Tax Increase and Ad Ban Plans

Bulgaria’s government has declined opposition-backed proposals that sought tighter restrictions on gambling advertising and higher taxes on gambling operators, arguing that such measures could strengthen the country’s illegal market rather than reduce gambling-related harm.

The debate took place during discussions surrounding Bulgaria’s 2026 budget, where lawmakers considered several gambling-related amendments. While parliament approved some targeted fiscal measures, broader proposals aimed at raising gambling taxes and further limiting advertising did not gain government support.

According to SBC News, Deputy Finance Minister Lyudmila Petkova told a special commission reviewing the budget that the Ministry of Finance believes gambling policy should be examined through a comprehensive review of the regulatory framework rather than through isolated amendments.

The dispute reflects differing approaches between the government and opposition parties. Both Democratic Bulgaria and We Continue the Change have advocated gambling reforms, though each has focused on different areas. Democratic Bulgaria has pushed for higher taxation and increased licensing fees, while We Continue the Change has campaigned for stricter advertising restrictions in densely populated locations.

Government Warns of Impact on Legal Market

Government representatives cautioned that increasing gambling taxes could weaken Bulgaria’s regulated sector, which already faces competition from unlicensed operators.

Earlier this year, Bulgaria raised the online gambling tax rate from 20 percent to 25 percent of gross gaming revenue, while operators also remain subject to a 10 percent corporate tax. Democratic Bulgaria proposed increasing the gambling tax rate further to 30 percent and introducing significantly higher licensing fees.

Petkova argued that another increase could have unintended consequences.

“The proposal to increase the tax sounds very good at first glance, but the real effect of the measure will be the transfer of players from the legal to the illegal market. The share of the gray sector in gambling is currently about 40%. The 20% tax is a European balanced standard. Most countries apply a tax of 20% or 25%. Any increase in gambling taxation leads to an increase in the gray sector.”

During parliamentary discussions, Petkova also raised concerns about Bulgaria’s channelization performance. According to government estimates, approximately 60 percent of gambling activity currently takes place through regulated channels, leaving a substantial portion of the market outside official oversight.

She reiterated the same concerns before the budget committee, stating: “Yes, the proposal to increase taxes sounds very well, but any increase before taking measures to limit the grey sector means shifting players from the legal to the illegal market.”

Government officials indicated that addressing the unregulated sector remains a priority before considering further tax increases.

Full Gambling Law Review Underway

Alongside rejecting the proposed tax increase and expanded advertising restrictions, the Ministry of Finance confirmed it has begun work on a wider assessment of Bulgaria’s gambling legislation.

According to Petkova, repeated amendments introduced through unrelated legislative processes have complicated the legal framework and created difficulties when later corrections become necessary.

“We are starting work on a comprehensive review of the Gambling Act. The reason is that amendments are regularly made to it between the first and second readings of other laws, and then years are needed to correct the consequences of the inaccuracies.”

The review is expected to involve the National Revenue Agency, which oversees gambling regulation under the Ministry of Finance. The agency is currently operating without a Director of Gambling Policies following the departure of Alexander Popov.

At the same time, Bulgaria’s 2026 budget contains a proposal to introduce a licensing framework for gambling affiliates. The planned system would apply a fixed annual charge of €6,000 together with a variable tax equal to 10 percent of commissions earned from gambling promotion activities. Officials estimate the measure could generate around €100m in annual tax revenue while helping combat tax avoidance.

Opposition Presses for Stronger Restrictions

Opposition lawmakers continued to criticize the government’s position, arguing that authorities have not gone far enough in limiting gambling promotion and addressing illegal activity.

Venko Sabutev of We Continue the Change voiced frustration during committee discussions after efforts to amend gambling legislation through transitional provisions were rejected.

“How could you change the Labour Code through transitional and final provisions, but not be able to change the Gambling Act and stop gambling advertising through the same mechanism?” he demanded during committee discussions. “Enough with this hypocrisy.”

The calls for tighter controls come despite substantial advertising restrictions already adopted in 2024.

Under legislation passed unanimously by parliament on April 30, 2024, gambling advertising was prohibited across television, radio, print publications and digital media. The primary exception applies to the state-owned Bulgarian Sports Totalisator.

Outdoor advertising remains permissible under specific conditions. Billboards must be located at least 300 metres from schools, universities, playgrounds and other protected locations. In addition, at least 10 percent of advertising space must be devoted to warnings about gambling-related risks.

Rules also govern advertising displayed on gambling venues. Promotional material may occupy no more than 50 square metres or 20 percent of a building’s facade.