Not to be left out of a potentially lucrative source of tax revenue, the Bulgarian Ministry of Finance last week submitted proposals to regulate and tax online betting, iGamingBusiness reports.
Tired of watching potential tax dollars drain out of the national coffers, the former communist stalwart has decided to throw in the towel and join the fun.
Still, in a tip of the cap to its hammer and sickle glory days, the state has decided to keep its hand buried in the till. Although companies licensed in other jurisdictions will be allowed to service customers in Bulgaria, if reports are accurate the move seems primarily designed to strengthen the financial position of the current government monopolies.
The proposed regulations would allow the Bulgarian sports betting monopoly to develop new online games as well as hitch up with private companies, thus feathering the treasury while injecting much needed capital and expertise. The so-called "sports totalisator" would be able to, at least in theory, move into new markets, while taxing income from an anticipated expansion in online gambling.
The problem with the current system in Bulgaria is a confluence of excessive regulation and a thriving black market for internet gambling. The sports book and government lottery are required to disburse 50 per cent of their revenues as winnings, which, after the government takes its cut, means that total disbursements eat up a whopping 85 per cent of revenues. Not exactly a recipe for profitability.
Since estimates put current revenues from legal betting in Bulgaria at around $520m, with apparently another $440m gambled illegally, the government clearly feels cut out of much of the action. Old habits die hard. ®
Burke Hansen, attorney at large, heads a San Francisco law office