IS IT A SIGN OF NORMALITY THAT THE STATE CHANGES GAMBLING TAXATION EVERY YEAR?
For some time now, it seems to have become politician’s practice to blame the national gambling industry when something goes wrong.
by Attorney-at-Law Professor Marius PANTEA PhD
Electoral capital
If electoral capital is needed, ad-hoc legislative initiatives are taken to restrict the activity of licensed gambling operators (see the many and varied legislative initiatives currently before the Romanian Parliament). Local councils have also taken the example, flagrantly violating the legal provisions in force and deciding not to have gambling on their territory of competence (see the attempt of Bihor but also the HCL Mangalia of December 2022 – which prohibits gambling in some seaside resorts, because the Council wants it and voted for it).
If someone committed suicide in front of a gambling hall – they obviously lost at the slot machines (even if criminal investigation authorities have established that the victim had nothing to do with gambling).
If revenues to the state budget fall, the first on the list to incur additional taxes is none other than the gambling industry, even if it is not yet a year since the last tax increases (last year on 15 July) were substantial. We recall what was being circulated in the market at the time, that the country’s bigwigs had decided to collect the annual billion euro from gambling (said and done).
Is the gambling industry to blame for all this?
The fact that the consolidated state budget does not collect the projected amounts, while the gambling industry’s collection rate of all taxes and levies is almost 100% every year, is it the games that are to blame, or are the institutions that are supposed to ensure that the amounts are collected failing to do their job? If there is no agricultural production, the games are to blame (because it hasn’t rained or there have been devastating floods), if the price of utilities rises, the games are also to blame, if there is a crisis, the games have to take over, the other industries (who else are they?) have to be protected because… they produce (we don’t know what else they produce, because in our colony they only consume).
The fact that someone has run away with a lot of money and gambled it away is also the fault of the industry, even if it happens once a year, but the media coverage is fantastic, all the radio and TV stations pick up this kind of information and present it as a bombshell of the highest importance. If you follow the official statistics, it’s easy to see that more and more people commit suicide every year because of love, but the news with the biggest impact is the one that brings gambling, which everyone blames, to the fore. The number of winners in gambling is tiny less than the number of participants, and the “neighbor’s goat” – our national sport – says that if we have not won it means that there is something impure in the middle (it has nothing to do with luck) and then why not throw words (bad or funny) at gambling, that it is a great evil for society, but let me place a lottery ticket or a bet, maybe it will work this time.
The Parliament, Romanians and gambling
At the moment, in the halls of Parliament, they are talking about the devastating effects of gambling in Romania, and so let’s close them down, let’s send them 300 meters away from everything (schools, kindergartens, theatres, churches, etc.), as if those who want to gamble won’t make those 300 meters, let’s send them outside the cities – in other words, we’ll take their taxes and it’s their business whether they survive or not, and I don’t know what other stupid initiatives there are that have absolutely nothing behind them but the desire to gain electoral capital at any cost.
Unfortunately, no one in the political and decision making spectrum notices that there are no official statistics showing the need for such measures and, above all, no one is going to suggest educating these people – gambling is fun. As long as we don’t chisel away at the nation, we can impose a lot of taxes or other obligations on the gaming industry, and part of the population will feel that they can get rich quickly and effortlessly by participating in games. Only through education, gambling will be seen as a source of entertainment, as it happens in civilized countries in Europe and America, otherwise, every person who enters a gambling hall has the thought that after leaving there “will buy the Intercontinental”.
Budget deficit covered by gambling surcharge (again!)
Now there is a rumor that the parliamentarians want to limit the budget deficit and one of the measures they are considering is to increase taxes on gambling, but no one notices that the gambling operators have been in a paroxysm for almost a year. They pay higher taxes, they have problems with the price of utilities (which have become one of the main expenses of the licensed companies), with their staff (there is little support for salary increases), with the locations where they operate (whether certain locations near certain destinations will be closed, whether they will be sent to the outskirts of the city, what will happen?) and they are directly affected by the crisis that has begun to show its teeth here (lack of money, impoverished population, prices rising from one day to the next, financial blockage felt throughout the market, etc.).
We still blame those who strive to find solutions
Well, if the gambling industry is the one that pays all its taxes to the state budget in full, why not increase them, maybe this will increase the level of compliance and collection of taxes to the budget, that is to say, in Romanian, “we still blame those who strive to find solutions“.
Perhaps it is time for politicians to take a closer look at the gambling industry and put it where it belongs, legislatively and fiscally, alongside the major taxpayers to the state budget, allowing operators to run honest businesses and, above all, providing predictability, otherwise they will soon find that some operators will “close their doors”, jobs will disappear and, above all, significant sums of money will be lost to the consolidated state budget, which, given the current general situation, we do not really know what will replace it.
Chaos at the NGO
The chaos at the National Gambling Office (an institution that has not had a president for more than a year) has been exacerbated by the controls of the Ministry of Finance and the Prime Minister’s control bodies, which have issued meaningless reports demonstrating their gross ignorance of the sector, with proposals to punish the staff who applied the law (as bad and incomplete as it is – but they applied it, what else could they do? ), with proposals for reorganization without logic (merging two Directorates General in order to get rid of certain people in the NGO management), as well as the issuing of a decree prolonging the state of instability of licensed operators (both class I and class II) until 1 January 2024, pulled out of a hat so as not to block the market, prove that the only thing that matters to the government is the money the industry brings into the budget, nothing else.
Increasing gambling taxes will only bring instability
We believe that at this point, increasing gambling taxes will only bring instability to the gambling market, which will collapse under this additional burden. Honest operators will have to drastically reduce activity in order to survive, and the loss of revenue to the budget will be visible very soon. In addition, there will certainly be an increase in attempts to avoid taxes by operating games without paying the license and permit, black and grey locations, employment contracts will disappear (black or grey labour will proliferate – that means, on paper minimum wage or nothing, wages will be paid out of hand), rental contracts will decrease (part of the money on the contract, the other part out of hand) and so on. The losses will far outweigh the benefits of a chaotic tax increase in this area.
