Daniel Borisov

Impact of Restrictions on Gambling Enterprises

Started Apr. 14, 2025

Abstract or project description

This paper examines how Bulgaria’s gambling regulation has evolved since 1989 and how it compares with broader European trends, then quantifies the impact of online gambling legalization on market structure. First, a historical review traces key institutional shifts in Bulgaria, including the 1999 and 2012 laws, the 2020 ban on private lotteries, dissolution of the former regulator, transfer of oversight to the National Revenue Agency, and the recent near-total advertising ban with notable sponsorship loopholes. Second, the European context shows a continent-wide move toward tighter consumer protection through advertising limits, blacklists, and play restrictions, with Bulgaria following a licensing-plus-restrictions model. Third, the study estimates the effect of online legalization on the number of gambling enterprises using Eurostat business demography and a Difference-in-Differences framework with country and year fixed effects, complemented by an event study to assess pre-trends and dynamics. Results indicate a small and statistically insignificant average effect on enterprise counts, consistent with mild consolidation rather than expansion as online channels scale within existing firms. The findings stress that enterprise counts may mask changes in market power, revenues, and channeling to regulated platforms. Policy implications include the need to monitor concentration, advertising exposure, consumer harm indicators, and the durability of anti-corruption safeguards to judge whether Bulgaria’s current framework delivers effective protection alongside a well-regulated market.