Critical Amendments to Bulgaria's Gambling Act: An In-Depth Analysis by Martin Yakimov of Velchev & Co

In an exclusive piece for Gambling.Re, Martin Yakimov of Velchev & Co provides an extensive breakdown of the recent amendments to Bulgaria's Gambling Act, shedding light on their controversial nature and potential impact on the industry.

On April 30, 2024, during its final session before the upcoming elections, the Bulgarian Parliament officially approved controversial amendments to the Gambling Act. These amendments primarily target the restriction of gambling advertising and the regulation of gambling operators, particularly in relation to retail gaming halls and casinos. The amendments have been sent to the President for promulgation but he has not finalized the promulgation yet. On May 06, 2024 the President announced that his legal expert team is reviewing the amendments in view of the possibility to exercise his veto right due to the fact that such serious amendments were adopted overnight without a proper impact assessment.

In summary, the following amendments have been adopted:

1. Advertising restrictions:

·       Full and unconditional ban on all advertisements in radio, TV, print media, electronic media (including the internet), and public spaces (including building facades).

·       The only forms of advertising which remain allowed are:

1) billboards located at least 300 meters away from schools and other educational institutions, universities, playgrounds, dormitories, and social homes;

2) on the facades of retail gaming halls, betting shops and casinos (with a limit of 20% of the facade areas but not more than 50 sq.m.;

3) as sponsorships to sport clubs on sports equipment, sports facilities, except sports equipment, materials or products that are intended for use by minors.

·       10% of each advertisement material shall be a mandatory text about the risks from gambling, this rule applies to all forms of advertising except sports equipment advertising.

·       Limitations have been introduced on the content of gambling advertisements, restricting them to only the name, type of game, and operator's brand/trademark. It is explicitly stated that no numbers of any kind can be included in the advertisements.

·       Sanctions for illegal advertising have been increased to 30 000 BGN to 50 000 BGN for gambling organizers breaching the advertising rules.

·       A very broad legal definition of gambling advertising has been introduced, encompassing any communication that encourages participation in gambling activities or uses the name or trademark of a gambling organizer. More specifically, the following shall be qualified as a gambling advertisement:

„information which directly encourages consumers to participate in gambling activities, including by creating the impression that participation in the game will enable consumers to solve personal or financial problems or achieve financial prosperity, or by urging consumers to participate in the game with promises of substantial winnings. Advertisement of gambling activities also encompasses any form of commercial message, communication, recommendation, or action that uses the name of gambling activities or the trademark of a gambling organizer, as well as the name or trademark of a gambling organizer on products and goods.."

2. Responsible gambling (RG) changes:

·       Annual fees for responsible gambling have been increased by 10,000 BGN for online operators and doubled for retail operators. This amendment will come into effect after 4 months as of the entry into force of the amended Gambling Act.

·       A new ordinance will establish minimum mandatory RG measures, including limits on session duration, maximum loss thresholds, and bet amounts. As a minimum, the ordinance shall include:

            1) maximum duration of sessions on the webpage;

            2) maximum amount of loss for a defined period of time after which the player shall be        automatically temporarily registered as vulnerable in the central register of the NRA and      thus temporary excluded from gambling;

            3) maximum bet amount per game types depending on the time of the day;

            4) all limitations shall be higher for players below the age of 24.

·       Vulnerable group exclusions and register of vulnerable persons:

The current group of vulnerable player which are not allowed to participated in gambling games will be extended by the authorities and the following categories of persons will be included in the group ex lege:

            1) persons who are on social support

            2) persons who are officially diagnosed with mental illness problems

            3) officially incapacitated persons.

·       As a breakthrough in favor of the operators - voluntarily self-excluded persons who have previously been registered as vulnerable will now be able to request deletion from the register 30 days following the date of registration. This is a breakthrough as currently the minimum self-exclusion duration was 2 years.

·       Operators allowing registered vulnerable persons to gamble will face temporary license revocation, extendable to permanent revocation after the third temporary revocation.

3. The following amendments aimed at restricting the black market have been introduced as well:

·       Telecom and internet operators will be obligated to restrict access to unlicensed websites or face fines ranging from 50,000 BGN to 200,000 BGN per breach.

·       Payment service providers (PSPs) must block transactions to or from unlicensed websites, with fines ranging from 50,000 BGN to 200,000 BGN per breach.

·       Individuals playing on unlicensed websites will face fines ranging from 500 BGN to 2,000 BGN.

·       Postal money transfers to and from unlicensed operators shall be prohibited.

4. Retail limitations:

·       Increase of the Gambling Halls minimum capital requirements to BGN 750 000. This amendment will come into effect after 4 months as of the entry into force of the amended Gambling Act.

·       Ban of Gambling Halls in populated areas with less than 10,000 persons (excluding resorts and border areas). This amendment will come into effect after 3 years of the entry into force of the amended Gambling Act.

·       Increase of the distance requirements to gambling halls and casinos to 300 meters from schools, kindergartens, playgrounds, universities, dormitories, and social homes.

·       Legally defined payment terms have been introduced for retail gaming halls and casinos requiring immediate payouts for amounts up to 10,000 BGN and next-day bank transfers for higher amounts.

·       Explicit ban on the new business model of putting terminals for access of online gambling webpages in retail sites.

5. Other amendments:

·       It is now explicitly stated that the mandatory investments shall be kept for the whole duration of the license. 

·       Pre-paid vouchers are no longer a legal deposit payment method.

·       Systematic breaches of the AML/CFT legislation are now grounds for permanent license revocation.

·       A special procedure for remedy of breaches has been introduced to prevent license revocation which also allows the operators to voluntarily return their license during the procedure to avoid having their license revoked since revocation would impede their eligibility for future licensing opportunities.