Betting and lottery business – polices, taxes and benefits

  • Kristiyan Ivanov Higher School of Insurance and Finance
Keywords: lottery, gambling, lottery taxes, chance, bet, gambling financial reflections, UK Gambling Commission

Abstract

Relevance of research topic. Bulgarian tourism is a significant contributor to the country's economy. In this regard, the gambling as need of the modern man has its important place in the regional tourism and entertainment sector similar to other developed countries. Collecting taxes and fees is a fundamental way for countries to generate public revenues and Bulgarian gambling sector is not an exception. Formulation of the problem. The lottery takes a key segment of the gambling sector. The National Lottery establishment and evolution has been financially motivated. The Government had seen the chance of collecting significant funds to the state treasury and investing them into new projects. However, government money comes from the gambling sector should be directed to good causes. Analysis of recent research and publications. Most of the materials, publications and researches realted to the lottery and gambling sector have been written and published last decades by the leading countries scientific authors. Such issues as certain categories related to the interests of social entities involved in gambling; some definitions related to the gambling, its elements and motives are investigated. Some problems, ideas and solutions were discussed in few reports and scientific conferences handling by different institutions and organizations. Setting the task, the purpose of the study. This study has its purpose to briefly highlight and present a scientific perspective of some basic logics, principles and significant financial reasons of the lottery business genesis and betting business evolution. Method or methodology for conducting research. This study uses data and sources selected on the basis of various methods and approaches such as observation, analysis, synthesis, systematization and summarization of information; professional research; study of objects and goals; trend analysis; statistical analysis of various databases; statistics and data sources. Presentation of the main material (results of work). This study will successively compare few leading European markets experience and practice to the Bulgarian market conditions. Furthermore, some economic and financial challenges facing the sector will be open-to-ponder subject. In 2019, the total European gambling market (EU-27 and UK markets only) was worth €98.6bn, with online gambling accounting for €24.5bn in gross gaming revenue. The market share of online gambling is growing steadily and is expected to reach 33.6% of Europe’s gross gaming revenue by 2025. The state-owned company “Bulgarian State lottery” (“BSL”) could be much profitable wellspring of sustainable fresh finances. “BSL” company falls under the purview of the “Ministry of Youth and Sport” (“MYS”) therefore has an approved certain annual budget, but also much expenditures including state taxes and direct contribution to the “MYS” for support of education and sports. The research has shown that “BSL” sports and education annual transfer payments to the “MYS” are dropped with 11.66 % for the period of 2015-2019. During the researched period “BSL” operator has been survived on a very difficult situation competing with solid players on the market where some ambiguous legal restrictions created an opportunity to limit the efficiency and effectiveness of the state-owned lottery which led to certain market advantages for its private competitors. Based on some additional calculations, the private lottery companies’ revenue growth reached its highest level in the last years. Conclusions according to the article. The Gambling and betting tax revenue plus National Lottery revenue widely called a “painless tax” (because of its voluntary nature) flowing a tremendous financial resource to the state budgets of those well-regulated markets.  According to the guidelines of the OECD, the regulations of a competitive environment must not unduly discriminate against state-owned enterprises compared to their market competitors. However, as a result of the February 2020 legislation “fine-tuning” the Bulgarian lottery industry picture got some changes with reflecting into monopoly market position of “BSL” company over lottery games and instant lottery games as well.

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Author Biography

Kristiyan Ivanov, Higher School of Insurance and Finance

PhD Student

Published
2021-05-22
How to Cite
Ivanov, K. (2021). Betting and lottery business – polices, taxes and benefits. University Economic Bulletin, (49), 174-181. https://doi.org/10.31470/2306-546X-2021-49-174-181
Section
Finance, Monetary Circulation and Credit