GAMBLING IN ROMANIA BETWEEN PANDEMIC AND WAR
By Av. Prof. Dr. Marius PANTEA
In the last article I wrote, I concluded by expressing my hope “that this year will no longer be a burden for land-based gambling operators, that solutions will be found to allow them to carry out their activities without affecting public health and that the authorities will also take into account the needs of this industry, which makes a considerable contribution to the state budget”.
Here we are halfway through the year and it seems that hopes are dashed, given the fact that the latest public discussions related to gambling in our country have put on the table some measures that, if implemented, will “bury” for good what is left of the national gambling industry. And I am referring here to the news in the press which sounds something like this: “Governing coalition wants to increase gambling winnings tax to 40%”[1], “The government has found sources of revenue in the Budget: gambling will be over-taxed”[2], “Government prepares special measure for slot machines: 40% tax on winnings”[3], “The government plans to raise the tax rate on gambling winnings from 1% to 40%”[4] and other such news.
Well, if the gambling industry was not over-taxed for two years, while the pandemic lasted, which was suddenly extinguished with the start of the war in Ukraine, being the only one that paid the license and authorization fees in advance, even if there were long periods when the activity was stopped or restricted (the famous no-operation program between 2200-0600 hours), then I don’t think there was any other branch that benefited from “so much care” from the authorities. In the time of the pandemic, the first two months (state of emergency), the administration allowed the gambling industry to benefit from a tax exemption, which was natural, after which it reconsidered and established unequivocally that only certain taxpayers could benefit from exemptions, but not the gambling industry, which was forced to pay in advance even if it did not operate land-based gambling, forcing licensed gambling operators to accumulate debts, which they staggered in the hope that once the pandemic was over, they would be able to recoup their losses and carry on business.
Once the pandemic was over, the industry breathed a sigh of relief, but then came the war, and with it the prospect of a global economic crisis, with huge fuel, gas and electricity prices, and the ever-increasing needs of the state budget, and the authorities set out to “reduce ludomania” by introducing huge taxes on gambling revenues, in the hope that two things would be solved, namely increased revenues for the state budget and an end to gambling addiction. Nothing could be further from the truth, in our opinion, if we take into account the fact that through over-taxation, players will find any solution to avoid paying taxes to the state budget (which will lead to a drastic decrease in state revenues), and licensed operators will be forced to restrict their activity (the number of authorized gaming machines will decrease), the loser being the state budget which will no longer collect the authorization fee for the out-of-service gaming machines.
On the other hand, the ONJN should inform on the fact that for some time now it has been sitting on large sums of money, collected from gambling operators, precisely to prevent and combat gambling addiction. We recall the legal obligation of gambling operators and those who carry out related activities to pay annually amounts between 1,000 and 5,000 euros, which unfortunately the ONJN management used only to pay some salaries, otherwise not a cent was used for social programs to prevent and combat addiction. At the moment, there is no country-wide study that tells us how many gamblers there are in Romania and how many of them have addiction problems, what is the degree of addiction of young people, what are the risks of excessive gambling and, why not, what are the benefits of participating in licensed gambling.
As such, we believe that before taking any measure in this field, politicians should consult with the Romanian gambling industry, which is currently represented in the Advisory Council of the ONJN and which can provide absolutely necessary data and information that can be considered in order to take such a measure.
Without blaming the management of the Office, which for more than two years has failed to introduce legislative regulations to support this industry, be it gambling operators or to reduce addiction, I reserve the right to draw attention to the fact that tax measures affecting operators and players in the industry will certainly lead to decreases in the amount of money being transferred to the state budget.
On another note, I draw attention to the fact that for more than a year now, the National Gambling Office, through its more or less competent management, has failed to solve the problem of accreditation of Class II licensed operators for conformity assessment bodies. Given that in the last two years there have been two orders regulating and managing the field, given that the RENAR has submitted the Accreditation Scheme to the Office for approval and given that with the amendment of Order 404 there are now less than 12 months left for the CABs to become accredited in the regulated field of gambling.
Unfortunately, in the last two years the ONJN leadership has been almost non-existent (with a few ominous exceptions, which I have mentioned in previous articles). In the gambling market, it has allowed, through passivity, the abusive entry of some authorities into the casino floors (see the unheard-of fines imposed by the local police, gendarmes and other control bodies for imaginary contraventions – payment processing activity carried out in specialized locations was drastically sanctioned during the period when gambling operations were stopped, sanctions were imposed for failure to comply with the working hours that took into account the number of infections in relation to the number of inhabitants, etc.). This did not support the industry in any way (by issuing orders setting out in concrete terms how to calculate and pay the licensing fees during the period when the gambling facilities were not in operation), leaving room for arbitrariness, which introduced some frustration among gambling operators (the feeling of “privilege” arose – some pay, some do not pay and others pay as much as they want and when they want). To all this, the management of the ONJN has added its own blunders, which has not been firm when it was really necessary, and I am referring here to the fact that even today, documents cannot be submitted to the Office with an electronic signature, the Payment Order/Extract from the bank with a holographic signature and stamp must still be brought, otherwise it’s a “big trouble”. It is determined discretionary by “a superior“, who can be on the agenda and who cannot (because it is not the complete documentation – CAF or other documents issued by another state authority, because there is no accreditation – which at this point cannot be taken, for an extra comma or a misunderstood phrase and a host of other examples). Never mind the fact that gambling operators are partners of the state in the operation of the monopoly (in that they collect from players the amounts for taxes and duties which they then remit to the state – gambling being the industry with almost 100% declared revenue and payment to the state budget). It is considered that they must be sanctioned, so anyone who has a crazy idea, presents it and that’s it, a new rule appears during the game, and the operators are obliged to fully comply because the “ONJN” said so.
Not more than a few days ago, as if we were in the famous scene “Mihaela, my love”, the Office was the subject of an episode that shows us once again the ridiculousness of today’s political world, what I mean is that the former President was dismissed from office and a new President was appointed, and then, three days later, he too was dismissed from office this time, so that the current Vice-President was appointed to head the Office. Without claiming to be experts in the field, just looking at what happened, we wonder what were the reasons for appointing and then dismissing the new President not three days after his appointment?
Given the troubled times ahead, the state budget needs every penny collected from this industry, and the solutions to maintain and increase the amounts paid to the state budget by the Romanian gambling industry are not excessive taxation of either gambling operators or players. It should be borne in mind that the price increases also affect gambling operators, who pay energy, gas and fuel bills. We believe that in order to limit gambling addiction it is necessary for the Office to immediately start using the money at its disposal to do the following:
- conduct a nationwide survey to determine the number of players in Romania;
- conduct a study to determine the number of players with addiction problems and their degree of addiction;
- launch projects managed by the Office or by the gambling industry through specialised firms to rapidly identify and propose regulatory and case-specific solutions to prevent and combat the development of gambling addiction.
The last period of time has only deepened the rift between gambling operators who have been divided by the management of the Office into two camps, pro or against the former management of the Office, and this can be seen with the naked eye!
I believe that this state of affairs must be brought to an end immediately, by appointing to the head of the Office people who have a thorough knowledge of the field and who can identify and provide the legislative and practical solutions that will allow this industry to continue to operate normally and with legislative predictability.
[1] In this regard, please consult: https://www.casinoinside.ro/coalitia-de-guvernare-doreste-sa-creasca-la-40-impozitul-pe-castigurile-din-jocuri-de-noroc/
[2]In this regard, please consult: https://www.mediafax.ro/social/guvernul-a-gasit-surse-de-venit-la-buget-jocurile-de-noroc-vor-fi-supra-impozitate-20922009
[3] In this regard, please consult: https://observatornews.ro/economic/guvernul-pregateste-o-masura-speciala-pentru-pacanele-impozit-pe-castig-de-40-475436.html
[4] In this regard, please consult: https://stirileprotv.ro/stiri/financiar/guvernul-intentioneaza-cresterea-dura-a-cotei-de-impozitare-a-castigurilor-din-jocuri-de-noroc-de-la-1-la-40.html
