BULGARIANS MULL ONLINE GAMBLING TAXATION
23 November 2007
Review of gambling tax laws could herald a
legalised online gambling environment
The Bulgarians could be considering a more pragmatic
approach to online gambling following a review into the
taxation of gambling generally in the Eastern European
nation.
Reporting on the review, the country's major newspaper 'Trud'
claimed that hundreds of millions of leva (2 Bulgarian
leva = Euro 1) “leak” through online gambling sites.
Apparently Bulgarian legislators have been mulling the
issue for over a year, considering measures that would
regulate and tax betting over the Internet, at the same
time allowing the Bulgarian sports totalisator to start
new types of [online] games as well as secure its future
development through partnerships with private companies.
If and when this change takes effect, the sports
totalisator would have the opportunity to compete for
new markets, and regulated online betting would allow
the state to impose taxes on the income from the
Internet gambling. No formal legislation has yet been
launched, however.
The review considered a change in the tax regime for
traditional gambling interests, too and has been
followed by a proposal that the present 10 percent tax
on revenues be amended to allow gambling organisations
to deduct winning payouts from total income.
Last week the financial ministry presented its proposals
for alterations in these tax laws with a suggestion that
tax on numerical games such as toto, lotto or lottery
will be imposed only on income remaining after
subtracting winnings from revenues. Previously the state
imposed a 10 percent tax on the entire revenue of the
companies.
'Trud' opines that private companies will not benefit as
much as the state-owned gambling companies. The
totalisator, and the state lottery too, is required to
disburse 50 percent of its revenue as winnings, and
together with tax and other mandated payouts this brings
total disbursements to a total of over 85 percent of its
revenues, leaving the organisation relatively
cash-strapped despite the significant revenues that it
generates. This has placed constraints on the amount
that can be invested in competitive new technologies.
Under the new tax proposal, the position of state
companies would be considerably improved.
According to official data, the current revenue from
legal betting in Bulgaria is around 700 million leva
(Euro 350 million). However, Bulgarian experts claim
that another 600 million leva is being gambled illegally
and outside the tax net.
Online Casino News courtesy of
InfoPowa
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