EKIP– Expert Club for Economics and Politics A Different Opinion
In recent months, the issue of regulating the gambling sector in Bulgaria, and in particular lottery games, has unexpectedly become a hot topic in the public sphere. The specific reason for the rise of this topic were the proposals of the Deputy Prime Minister and leader of the Bulgarian National Federation of Gambling Associations Valeri Simeonov for a complete ban on advertising lottery games and other gambling activities (specifically on television) and the restriction of the sales of lottery tickets and slips only in state-licensed establishments for this activity. The main motive in support of the proposed extremely severe regulations is the claim, quite widespread in popularity among the Bulgarian public, that Bulgaria has a very serious problem with gambling addiction (related in particular to lottery games). A problem whose scale, according to some, resembles an "epidemic".
The EKIP actively participated in the conversation about the regulation of the gambling sector from the very beginning by publishing a short article on the topic (and several others subsequently) and took part in a number of media debates on the topic. From the very beginning, we expressed our reservations regarding the specific bill and its potential economic effects, especially in the absence of 1) any data that supports the thesis of its main motive and 2) any impact assessment. However, treating the topic "piecemeal" is not enough to clarify the full context of the case and to clear the debate of all the unfounded speculation and manipulations that, quite naturally for such an emotionally heated topic, accompany it. Therefore, we have prepared a comprehensive and detailed analysis and criticism of the proposed Draft Law on Amendments and Supplements to the Gambling Law, which you can read here. Here are the goals of this text:
The purpose of this text is to present a critical analysis of the proposed Bill to Amend and Supplement the Gambling Act, submitted to the National Assembly on 11.05.2018 by deputies in the United Patriots group. The proposed bill envisages the imposition of new, more severe restrictions on the advertising and distribution of lottery games in Bulgaria. The introduction of such restrictions is motivated primarily by the desire to limit the level of gambling addiction among Bulgarian society.
The main changes proposed in the bill are:
- Adding a ban on the sale of lottery tickets and slips by individuals and entities without a special state license issued for this purpose
- The ban on absolutely any type of advertising of gambling (and in particular lottery) games, including indirect advertising (direct advertising is already prohibited)
- Defining "indirect advertising" as "any form of commercial communication that includes the name of a gambling game or the trademark of an organizer and/or activity on products and goods related to gambling."
In this text, we will present a critical analysis of both the stated motivations for the bill and the potential fiscal and economic effects it may have, based on all available public information on the subject. It is important to note here that with regard to gambling advertising, direct, or "direct" advertising of gambling activities, as well as advertising of gambling activities aimed at minors and children, are already prohibited by the Gambling Act. The State Gambling Commission is the institution that monitors compliance with this aspect of the law.
In the first part of this text, we present an analysis of the motives and potential effects of the proposed bill, starting with an analysis of the claims and speculations that there is a massive gambling addiction in Bulgaria. We then proceed to a review of the relevant scientific literature in the field of gambling and gambling addiction around the world, and more specifically in the USA and Europe. We conclude the first part of the analysis with a criticism of the lack of a much-needed impact assessment of the proposed bill and our analysis of the potential fiscal and economic effects of its implementation (to the extent that they can be assumed based on the available data).
