This summer has been hot for all intents and purposes. And if we managed to get used to the scorching heat of the last few summers, it seems that we are starting to get used as well to the way the Romanian State taxes and charges areas at will, without impact studies and with immediate application. We thought it appropriate to find out what is the point of view of the professional association representing the online gambling industry – the Association of Remote Gambling Organizers (AOJND) about the situation created given that this branch of the gambling industry in Romania has been greatly affected. That’s because, in addition to the over taxation, which was felt by everyone – landbased or online business -, in this area, operators have accused a lack of transparency from the authorities and felt a discrimination against their business, especially since the field has always considered itself a dialogue partner of the Government. We invite you to read an interview with
Mrs. Odeta Nestor – President of the Association of Remote Gambling Organizers (AOJND) to get a more detailed understanding of how online gambling in our country is trying to reflect on what happened this summer and make the best decisions for the future, so that business in this area can maintain the vitality and growth of previous years, despite political and economic pressures.
This year, the Romanian Government decided a surcharge on the gambling industry, both land-based and online, for both operators and players. How will these overblown tax increases affect the online gambling industry in the medium and long term?
We have identified two big problems with this increase, beyond the increase itself. Firstly, it is the lack of transparency of the authorities. This was one of the deeply disappointing aspects, as the online gambling industry has consistently shown its willingness to dialogue, negotiate and find solutions that are acceptable to all parties. We have always considered ourselves to be a dialogue partner of the Government, which is why we were really surprised by the decision of the authorities to change the taxation system of the sector without prior consultation and without giving time for negotiation and reflection. We understand the Government’s need to find sources of funding, especially in a difficult context, but the solution is not to take decisions overnight and without a theoretical and practical basis.
Secondly, we feel there is discrimination against online gambling operators. We are surprised by this attitude, all the more so because, through the transparency and mechanisms specific to the online area, this industry ensures the traceability of revenues, the transparency of the game and payments, a clearly monitored and regulated framework that can be more correctly and easily managed.
Another point I would like to make is that I have often heard as an argument – or rather as a reproach – that there are no Romanian companies online. It is a false argument and I think it is not acceptable for a European country, for a country that has developed in recent years mainly on the basis of European funds.
Returning to the issue of charging, the Government’s approach was deeply flawed and we will consult with operators in order to refer the matter to the European Commission. We cannot accept differentiated charges per type of operator for the same products.
There are discussions at the moment with the political decision-maker in Romania for legislative changes regarding certain restrictions on online gambling operators to advertise their image on TV and online. How would such restrictive legislation affect the business environment in the field you represent?
The subject has been discussed at AOJND level and there is a very clear industry opinion that, to summarize, considers the changes unfounded. We want this point of view of the online gambling industry to be brought to the attention of the relevant parliamentary committees and taken into account. We will take part with all openness and with all legal arguments in the debate on the new changes adopted by the government unfounded in our opinion.
Please tell us what are the amounts that online gambling operators licensed in our country pay to the state budget? What are the other figures that can create a complete picture of the online gambling industry in Romania?
According to the ONJN’s activity report for 2021, total remote gambling fees for last year were over 1 billion RON.
To this amount must be added the Class II license fees as well as the corporate income tax and payroll tax for employees and related services.
So, we are talking about a considerable amount which I think is a sufficient argument to understand that they are an important part of the gambling industry and with a significant contribution to the state budget.
Besides the increase in taxes, what other problems are online gambling operators facing in our country?
First of all, after this summer’s episode of untimely increases – adopted without any real consultation with the industry – confidence in the authorities has been shaken. Looking back, I would say that it was not necessarily the increase itself that was the main negative aspect, but rather the message sent to operators. In order to invest, to build long-term business, transparency and predictability are needed, and authorities did not meet these two requirements.
Under these conditions, operators will feel discouraged and will be hesitant to come or develop their existing business in Romania.
Lately there is more and more talk in the world about „safe gambling”, and in Romania the discussion related to the gambling addiction is periodically resumed, especially in a political note. What can we expect in the coming years from this perspective? Is the online gambling industry sufficiently prepared to implement more enforced „know your customer”, „self-exclusion” or „safe gambling” measures?
As far as the „safe gambling” area is concerned, we have repeatedly said that the online segment is best positioned to ensure a responsible gambling environment.
Online operators are the ones who have made the biggest investments and applied technical systems to encourage responsible gambling (using artificial intelligence, online platforms exclude minors and players with suspicious behaviour patterns from the game). In addition, the online system allows for correct recording of income, so it is an area that excludes tax evasion.
In Romania, according to H2GC estimates, approximately 90% (89%) of all online games are played on sites licensed in Romania (channeling rate), which represents a success at European level. So, there is no such trend in the current system, but in the event of a legislative change like the one discussed, we will certainly discuss such a phenomenon. The activity reports of the ONJN show a 99% collection of gambling taxes which reflects the degree of compliance.
Why has the management of the ONJN not convened the Advisory Council in recent years to discuss with operators within a legal framework? Are the discussions held in private?
It’s a question I’ve been asking myself for a long time. Of course, in the absence of a real dialogue with the successive managements of the ONJN, the question remains a rhetorical one and I can only assume that it is another way of showing lack of professionalism and lack of interest in the real problems of the gambling industry and its legitimate interests. It is a manifestation that we have encountered in other contexts from the ONJN.