We heard that you are currently involved in several affiliate licensing procedures. What have you seen so far in practice, and how straightforward has the application process been?
The legislative amendments were introduced very quickly through the Bulgarian State Budget Act, and from their entry into force to the licence filing deadline on 15 August, there were only two weeks. This created significant practical difficulties. To begin with, there was no clarity on the exact procedure or the precise requirements. The NRA issued its guidance on the application of the law and the application form template one week before the filing deadline. On top of that, a large proportion of affiliate operators are foreign companies, and they had no realistic way to learn about the new regime other than through the gambling operators whose products they promote.
What has been a pleasant surprise is the regulator's responsiveness. We have been in constant contact with the NRA inspectors working on the applications. Even though they informed us that over 80 applications had been filed by the deadline, the inspectors managed to respond within the short statutory timeframes, review the applications and issue instructions where necessary.
The applications themselves are not overly complex. The main requirements are identifying your digital channels, providing copies of your affiliate agreements, and, if you are a foreign entity, designating an authorised representative in Bulgaria. One of the main difficulties is that, unlike many other proceedings before the NRA, the Bulgarian Gambling Act requires that documents submitted in licensing procedures be in the most stringent form of validity, namely, notarised originals and certified translations. These heavy formalities, given the short deadlines, have been one of the main practical difficulties.
How clear is the distinction between a traditional advertising service and a performance-based affiliate arrangement under the new rules?
The Gambling Act draws the line quite clearly in principle. If your remuneration is fixed, a flat fee for a banner, a media campaign, technical services, then you are not an affiliate operator and do not need a licence.
If your remuneration is performance-based, i.e., linked to the number of referred players, deposits, wagers, or paid-out winnings, then you are an affiliate operator and you need to be licensed. The NRA's guidance reinforces this by specifying that, for a person to fall outside the affiliate operator definition and not require a licence, their remuneration must not be "directly or indirectly" linked to such results.
In practice, however, there will be grey areas. Hybrid models in which a fixed retainer is combined with a performance bonus, or arrangements in which the performance element is structured through a related entity, will require careful analysis. We would expect the NRA to take a substance-over-form approach, and affiliates should be prepared for scrutiny of arrangements that appear designed to circumvent the licensing requirement.
Could the new licensing requirements change the way affiliates structure their commercial agreements with gambling operators?
Absolutely. Operators are now explicitly prohibited from working with unlicensed affiliates, and there are substantial penalties - up to €20,000 ($23,220) per violation, doubled for repeat offences. So, operators will need to see a valid licence before entering into or continuing an affiliate relationship.
In the medium term, we expect the market will consolidate around professional affiliates who treat compliance as a competitive advantage
Then is the fee structure. The 10% variable fee on results-based commissions, withheld and remitted by the operator rather than the affiliate, effectively makes operators the tax collection point. This will need to be reflected in the contractual framework, particularly in commission calculations, payment mechanics, and reporting obligations.
We also expect to see more detailed compliance and termination provisions in affiliate agreements, granting operators the right to suspend or terminate the relationship if the affiliate's licence is revoked or suspended.
Will operators need to take greater responsibility for checking the licensing status and compliance of the affiliates they work with?
Yes, significantly. The law explicitly states that operators must not use the services of or pay commissions to affiliates without a valid licence. The NRA maintains a public register of licensed affiliate operators and its guidance makes clear that operators should verify their affiliates' licensing status against this register.
Beyond the register check, operators also withhold and remit the 10% variable fee on performance-based commissions, so they have a direct financial compliance obligation. The penalties for non-compliance are serious, and the NRA has signalled that it will enforce these actively.
How significant are the new licensing fees and compliance costs likely to be, particularly for smaller affiliates?
The annual licence maintenance fee is €6,000, which is payable by 31 March each year or upon issuance of the licence. On top of that, there is a 10% variable fee on results-based commission income, but this is withheld and remitted by the operator. The commission income on which this fee has been paid is then treated as non-taxable for corporate and personal income tax purposes.
That said, the €6,000 annual fee, combined with the costs of legal and administrative compliance, including maintaining an authorised representative in Bulgaria, will be meaningful for smaller affiliates with modest revenue from the Bulgarian market.
Could the new regime reduce the number of affiliates operating in the market or instead create a more professional and consolidated sector?
We think we will see both effects simultaneously. In the short term, there will certainly be a reduction in the number of active affiliates - some who were dabbling in the Bulgarian market with relatively low volumes will decide that the compliance burden is not worth it. But this is precisely the policy objective: to create a transparent, regulated environment where only serious, accountable players participate.
File your application if you have not already done so and take the process seriously. The penalties for operating without a licence are substantial, and operators are under direct legal obligation not to work with unlicensed affiliates
In the medium term, we expect the market will consolidate around professional affiliates who treat compliance as a competitive advantage. Licensed affiliates will be more attractive to operators because they reduce operators' regulatory risk. The Bulgarian approach broadly aligns with what we are seeing across regulated European markets, and we believe it is a positive development for the industry's maturity and credibility.
What impact do you expect the changes to have on the wider Bulgarian affiliate landscape over the next 12 months?
The next 12 months will be a period of adjustment. The immediate priority is getting through the licensing process, as the NRA will need to process a significant backlog of applications and we expect the first wave of licences to be issued in the coming weeks and months.
Once the initial licensing round settles, we anticipate the focus will shift to enforcement. The NRA will identify and act against unlicensed affiliates and operators, tighten their compliance processes and impose the first administrative sanctions, setting precedents for how strictly the regime will be applied.
In addition, we know that the current Parliament is already discussing further amendments to the Gambling Act that address the restrictions on gambling advertising methods, and these changes will directly affect affiliate operators as well.
If you could give one piece of advice to an affiliate currently operating in Bulgaria, what would it be?
File your application if you have not already done so and take the process seriously. The penalties for operating without a licence are substantial, and operators are under direct legal obligation not to work with unlicensed affiliates. Get proper legal advice, make sure your documentation is in order, designate a reliable authorised representative in Bulgaria, and start thinking about how your commercial arrangements need to adapt to the new framework. The affiliates that invest in compliance now will be the ones best positioned to thrive in the regulated market.