Bulgaria will begin taxing the gambling sector’s GGR at a higher rate starting January next year.

The decision was quietly introduced in the new Budget, with the Balkan country scrambling to fill a large fiscal deficit of minus €3.86bn.

What’s the new rate?

In the new amendments, operators of sports betting, lottery games, random events betting, and online gambling, will have to pay 25% tax on their GGR as opposed to the current fix rate of 20%.

Whilst still considerably low for a European market, the new tax on GGR will move Bulgaria a step closer to the upper bracket of tax regimes in other EU jurisdictions. 

This, however, falls in line with a current trend of tax increases across EU member states. Romania for example raised the tax on online gambling GGR from 21% to 27% earlier in July, while the Netherlands will raise the GGR tax ceiling to 37.8% from January 2026.

Bulgaria’s new Budget did not reference any commitments to dedicating the additional proceeds for a specific gambling-related purpose, signalling that this is a general revenue measure to support the state coffers in 2026.

How effective will it be?

In the wider context of the budget deficit the GGR tax increase will hardly be anything more than a symbolic gesture.

Estimates by market analyst firm Yield Sec showed that regulated online gambling providers in Bulgaria netted around €562mn in revenue for 2023. 

Whilst the analysis focused solely on online, given that the online segment is easily accessible and also the largest in terms of revenue, it would be safe to assume that the GGR from the land-based sector was either equal to or lower than €562mn.

For the sake of calculating the most optimal GGR tax return, let’s say both segments raked in €562mn of GGR each. That’s €1.1bn in total. Taxed at 20%, this would’ve meant around €225mn generated in tax. Under the new 25% regime in place, this will instead be €281mn. The €56mn difference covers roughly 1.4% of the €3.87bn budget deficit – a drop in the ocean.

How could this impact the market?

Even though the government will fill a tiny fraction of its financial shortfall, the tax hike could theoretically have a major impact on licence holders.

Since operators cannot deduct expenses like marketing, salaries, or platform fees before applying the tax, the change not only affects their profits but also their top lines.

This may lead to reduced bonuses or an overall scaling back of offerings from existing operators, whilst new entrants may start seeing the market as volatile and delay market entry.

Furthermore, if turnover begins to shrink, we might see a repeat of the paradoxical Dutch scenario where an increase in tax actually led to a drop in total tax take.

All in all, the situation is at a crossroads where it can take any direction – positive or negative – and with Bulgaria officially entering the Eurozone in January, there’s more than one reason to monitor the market up close.