Analysis of Bulgaria’s Parliamentary battle against gambling
The Bulgarian Parliament has voted against proposed revisions to the Gambling Act, aimed at curbing the pervasive influence of gambling advertisements. The amendments, proposed by Kostadin Kostadinov of the Vazrazhdane party, were defeated with a vote of 67-29, despite support from BSP for Bulgaria and populist party “There Is Such a People” ( Има такъв народ, ИТН). The proposed changes sought to address societal harms linked to gambling, including stricter advertising regulations and an empowered register for individuals experiencing gambling addiction.
However, dissenting voices from GERB-UDF cautioned against the potentially adverse effects on municipal sporting institutions, arguing that such measures would merely scratch the surface of addiction’s root causes.
Heat of the debate
Earlier this week, some of Bulgaria’s brightest minds engaged in the tireless debates on the topic of gambling in Sofia’s Parliamentary House.
“Human nature should remain untouched and unchanged.”
Lyuben Dilov, GERG-UDF, Bulgaria
It started at the end of last year when Kostadin Kostadinov, (pictured above), and his nationalist party, Revival (Bulgarian: ‘Vazrazhdane’), drafted a proposal to amend certain legislations in the country’s current Gambling Law. His aim was to create a better aligned regulatory framework. One significant point of interest was the almost complete overhaul of advertising rules. The amendments were proposed because the political party Vazrazhdane believes that this is necessary to counter the ‘onslaught’ of gambling adverts that pervade TV, radio, and other electronic media, reaching minors and vulnerable people – a clear contradiction to current regulations.
Four months after Vazrazhdane proposed the draft, Kostadinov, speaking from the Parliamentary tribune on 29 March, criticized his colleagues for their lack of interest in the draft and the failure of the relevant committees to consider it. He announced that Vazrazhdane would once again push for the amendments’ adoption by bringing it up the proposed changes for debate during the first plenary session for April. The party this week opened up the session with the amendments first in line for what turned out to be a two-hour long heated debate on gambling and how the industry has been strongly politicised. Clement Shopov, a member of the Vazrazhdane party, began by calling problem gambling ‘the quiet addiction’ due to the strong stigma among those experiencing harm, preventing them from speaking out. Shopov then outlined the main points which his party’s draft sought to amend.
He proposed the following amendments:
- A blanket ban for gambling advertisements;
- To optimise of the efficiency of the national self-exclusion registry;
- To increase land-based win payouts from 5000 levs (£2.2k) to 10000 levs; and
- Changes to the licensing tax and gambling levy.
Shopov accused the industry of using advertisements not only to attract a new audience, but also to maintain the interest of those vulnerable to gambling harm, which in his view, are the ones bringing in the most revenue for gambling firms. He cited other European countries such as the Netherlands, Belgium, and Italy as examples of stringent advertising restrictions that Bulgaria should strive to follow.
On the proposed changes to withdrawals, Shopov argued that it is preferable for customers to be offered instantaneous deposit and winning payouts from land-based casinos to a maximum of 10k levs. He believes this will deter customers from revisiting as banks can sometimes take a few days to transfer the funds.
Furthermore, Shopov called for the total eradication of licensing fees for gambling operators in favour of a 15 percent tax levy on all deposits made – just as it was prior to 2014 before the Bulgarian Socialist Party’s tenure. This, he believes, will lead to a more equitable and sustainable gambling industry in Bulgaria.
Lyuben Dilov, a member of the GERB-UDF party, expressed concerns about the proposed amendments to the Gambling Act. He was particularly worried about the potential negative effects these changes could have on municipal sporting institutions. These institutions often rely on sponsorships and partnerships with gambling companies for funding and sponsorship he said. Dilov further explained that if the proposed amendments were to pass, including a blanket ban on gambling advertisements, these institutions could lose a significant source of revenue.
He disagreed with the idea of completely banning gambling advertisements. He argued that such a measure would only address the symptoms of the problem (gambling addiction), not the root causes. In his view, the root causes of gambling addiction are tied to human nature and personal circumstances, which he believes should remain “untouched and unchanged”. This suggests that he thinks individuals should have the freedom to make their own choices, including the choice to gamble, and that the focus should be on providing support and resources for those who struggle with addiction, rather than imposing blanket bans.
In essence, Dilov’s argument is about balancing the need to protect vulnerable individuals from the harms of gambling with the potential economic impacts of strict regulations, and the importance of addressing the underlying causes of gambling addiction.
Implications for the gambling industry in Bulgaria
The impact of the proposed changes would depend on the specific details of the implemented amendments and how they are enforced. However these areas could potentially experience have a considerable impact as a result.
Advertising impact: A blanket ban on gambling advertisements could significantly impact the marketing strategies of gambling companies. This could lead to a decrease in the visibility of these companies and potentially affect their customer acquisition
Self-exclusion efficiency: Optimizing the efficiency of the national self-exclusion registry could provide better protection for individuals who wish to exclude themselves from gambling activities. This could potentially reduce problem gambling.
Increased payouts: Increasing land-based win payouts from 5000 levs (£2.2k) to 10000 levs could make land-based gambling more attractive to players. However, it could also encourage more gambling, which could lead to an increase in problem gambling.
Licensing tax and gambling levy changes: Changes to the licensing tax and gambling levy could have financial implications for gambling companies. Depending on the specifics of the changes, this could either increase or decrease the financial burden on these companies.
Impact on small companies and sole traders: The amendments could increase the financial requirements for small-sized companies in the sector and suspend the access of sole traders to licenses for casinos and gaming halls. This could potentially make it more difficult for small businesses and sole traders to operate in the gambling industry.
Regulatory shift: The shift of supervision from the State Commission on Gambling to the National Revenue Agency could lead to changes in the way the industry is regulated. This could have implications for how licenses are issued and how compliance is monitored.
Tax implications: The proposed changes could lead to a real increase in revenue for the fiscal authorities. The new texts in the Gambling Act led to equal taxation of bets placed on land-based and online bets on sports events, horses and dogs, and random events.
In the wake of the proposal’s defeat, all stakeholders are now keenly focused on the Bulgarian Parliament as they await to see whether the proposal will undergo revisions for re-submission or if a fresh proposal will be drafted and brought to the parliamentary floor for consideration. The outcome will certainly reshape the future of the gambling industry in Bulgaria.
