Key Moments:
- Bulgaria has approved a gambling tax increase from 20% to 25% of gross gaming revenue, set to apply in January next year.
- Regulated online gambling in Bulgaria generated approximately €562mn in GGR in 2023, with total GGR from all sectors estimated at €1.1bn.
- The new tax rate is expected to yield €281mn in annual revenue, covering only about 1.4% of the current national deficit.
Policy Shift Targets Fiscal Deficit
Bulgaria will raise the gambling tax on gross gaming revenue from 20% to 25%. The change takes effect in January next year. It forms part of a broader plan to close the country’s €3.86bn budget gap. The updated tax applies to a wide array of gaming activities, including sports betting, lotteries, random event wagering, and online gambling. Although Bulgaria’s new 25% rate remains lower than that in some European jurisdictions, the country is set to join the ranks of Central and Eastern Europe’s more heavily taxed gambling markets.
European Context of Rising Gambling Levies
The move mirrors trends across the European Union. Several governments are now raising gambling taxes to strengthen public finances. For instance, Romania lifted its online gambling GGR tax from 21% to 27% in mid-2024. Meanwhile, the Netherlands plans another increase to 37.8% starting in 2026. Analysts point to an emerging political consensus that gambling can be taxed more heavily as countries strive to counteract pandemic debt and increased government spending. In contrast to some European nations, Bulgaria’s latest Budget does not channel additional gambling tax proceeds toward specified social or responsible gaming programs, opting instead for a broad-based fiscal tightening.
Expected Financial Impact and Industry Implications
While the headline increase captures attention, financial projections suggest the actual effect on Bulgaria’s deficit may be limited. Analyst firm Yield Sec reports that regulated online gambling generated about €562mn in GGR in 2023. Together with land-based activity, total market GGR reached about €1.1bn. The previous 20% tax brought in €225mn each year. The new 25% levy should raise around €281mn—about €56mn more. However, that figure represents only about 1.4% of the fiscal deficit, signaling a primarily symbolic move from a financial perspective.
| GGR Tax Rate | Estimated GGR (€mn) | Projected Tax Revenue (€mn) |
|---|---|---|
| 20% | 1,100 | 225 |
| 25% | 1,100 | 281 |
| Increase | – | 56 |
Challenges for Operators and Potential Market Concerns
The practical consequences for the gambling sector could be more significant than the macroeconomic impact. Because Bulgaria taxes gross gaming revenue without allowing for deductions for costs like salaries, marketing, or technology fees, even moderate tax hikes can erode operator profitability. Analysts caution that the increased tax burden could prompt companies to reduce player incentives or limit marketing outreach. There is also the risk of delayed entry by foreign brands apprehensive about the heightened cost structure. Historical developments in the Netherlands suggest that raising tax rates can sometimes reduce total market activity and, paradoxically, lower overall tax receipts if consumers engage less with legal operators.
- Author
Daniel Williams
