Our gambling industry has been in turmoil with the announcement of the Romanian Government’s intention to increase the tax on players’ gambling winnings to 40%. We invited Mr Sorin Georgescu, president of the Slot Organisers Association – Romslot, to comment on this decision and to analyse the other issues facing the industry at the moment.
“The Romanian Government’s initiative to increase the tax on players’ gambling winnings to 40% will reduce by more than 30%, approximately 300 million euros, the taxes collected today from gambling by restricting the amounts played in landbase and online”
Sorin Georgescu
The Romanian government recently announced that it wants to increase the tax on gambling winnings to 40% from 1 January 2023. What is Romslot’s official position?
Romslot does not encourage any consumer taxation. We believe that the current tax model is transparent, predictable with a maturity that is reflected in the collection rate, over 98%.
Romslot or the industry associations have not been consulted about this initiative. The gambling industry prefers dialogue, documentation and simulations to tax “innovation”.
Romslot, or anyone who knows the industry, knows that additional revenue will not be collected to the state budget because customers will assume the risk and effort of not paying 40% of the payout or winnings.
The bottom line is simple: the initiative will reduce the taxes collected today from gambling by more than 30%, about €300 million, by restricting the amounts played in landbase and online.
According to information from Euromat, the European Federation for Landbase Gambling, taxing players’ winnings does not exist in countries like the UK, Germany, Belgium or others with similar organisations.
How much money does our industry bring directly to the state budget? Also, please tell us how much money the gambling industry brings to the budget, in addition to direct taxes and duties? What other important figures did the industry have in 2021?
The need for state budget money is legitimate in the global context but only where resources are available and where they have thrived in pandemonium.
The landbase gambling industry after 2 years of pandemic with closed activity, restricted as space and time supported salaries for over 40,000 employees and specific taxes in full.
Half of our revenues are specific, direct and indirect taxes. In 2021 the landbase industry recorded revenues of approximately 7 billion ron and a net profit of 550 million ron but paid direct and indirect taxes of over 3.5 billion ron.
From our estimates, in the absence of tax increases, taxes collected will naturally increase, both due to lack of restrictions and investments, in 2023 by 30% so that from landbase alone about 4.5 billion ron will be collected.
The ruling coalition parties justify the tax increases by the fact that “in times of crisis the gambling problem explodes and affects many families”. Instead, for several years now, there has been a legal obligation for gambling operators and those carrying out related activities to pay annual sums of between €1,000 and €5,000, which should have been used by the ONJN for social programmes to prevent and combat addiction. How do you comment?
The figures contradict this claim, they exploded in perception not in reality. In the pandemic the consumer has migrated from retail to online and naturally in all areas, not just gambling.
Online consumer advertising has exploded across the board. Gambling advertising supports sports, TV, advertising agencies. We need to work for responsible advertising as soon as possible.
Taxing gamblers’ winnings may help accelerate pathological gambling, but I think we’d better let the experts talk about that.
Romslot believes that the ONJN must continue to make every effort to allocate and use the money collected to meet responsible gambling objectives.
The gaming industry is blamed, many say that gambling leads to Luddomania, governments decided during the pandemic that gambling halls are places where Covid spreads and therefore kept them closed, it is said that there is crime in halls and casinos and many other negative connotations brought to our field. How do you combat these “preconceptions”, what are the programmes you have implemented as representatives of the industry?
The gambling industry has demonstrated in the midst of the medical crisis responsibility and maturity. We were the first to take all the necessary measures, masks, disinfectants, separators, distance, to protect our customers. The result has been visible as the gambling industry locations have not been identified with outbreaks or transmission environments.
We were the first industry to promote a pro-vaccination campaign in the media to support efforts to return to normality.
We have paid our fees in full but our revenue has been impacted by over 30% due to time and space restrictions until March 8, 2022.
The idea keeps being bandied about that our industry is too visible and that’s why the government keeps feeling the need to restrict it. What do you think? Do you agree with this allegation? Can we do business with the public without being visible?
Romslot does not advocate restrictions or limitations, but we do advocate responsibility in operation, marketing, communication and profit.
The gambling industry is responsible to propose a new responsible communication strategy towards the general public. The way we perceive encouragement to gamble through marketing campaigns or messages is different depending on the channel and audience.
We need to anchor our vision for the future in the trends of the current decade and appropriately dose the need for purchase to the channel and audience so as to mitigate the social impact to an acceptable level.
The problems caused by gambling are not solved by taxes and restrictions as exemplified in other countries over the last 2 decades. Bans or barriers are not a model for Romania and Europe.
For Romslot one of the most important things is education. Through education present and future generations have the chance to enjoy more the thrill and adrenaline of the game as entertainment and not as a source of income.
