Regulatory dynamics in the gambling Industry: perspectives and impact

As we have already become accustomed to, the gambling industry is characterized by continuous evolution, constantly bringing new elements and challenges.

by Alina Tace Partner WH Simion & Partners and Petrus Partene, Senior Associate

de Alina Tace
Partner WH Simion & Partners

de Petrus Partene, Senior Associate WH Simion & Partners

In the second part of July 2024, the National Gambling Office (ONJN) submitted two draft orders for public consultation, aimed at regulating the joint operation of gambling, as well as implementing rigorous measures to pre­vent and combat gambling activities carried out by unlicensed operators, addressed to Romanian citizens. At the same time, according to the information published on the ONJN website, the long-awaited progress in terms of drawing up the register of self-excluded and/or undesirable persons is also anticipated.

Joint exploitation of gambling

The draft order published in decisional trans­parency provides that such activity is allowed only on the basis of an agreement that provides for the performance of at least one of the following activities specific to gambling: (i) ope-rating gambling means, (ii) collecting and recor­ding stakes and/or paying out and recording winnings and completing documents related to day-to-day activities, (ii) drawing up/completion of documents specific to the gambling activities, registers and monthly statements for the generated income, corresponding to the type of gambling operated, or (iv) preparation of reports specific to the organization and operation of re­mote gambling.

The performance of the above-mentioned speci­fic gambling activities may be carried out exclu­sively using qualified personnel employed by any of the companies holding a class I (B2C) and/or class II (B2B) license, which jointly operate gambling.

Therefore, as can be seen at first glance, the draft order does not seem to bring, in its current version, substantial clarifications compared to the provisions regarding joint exploitation provided by Article 1 para. (51) introduced by Law 107/2024 (which also regulated the obligation to issue an order establishing the activities that are subject to joint exploitation) or in relation to the provisions already existing in the Methodological Norms.

gambling industry

B2B obligations – unlicensed gambling activities

The draft order provides in the opening sentence of art. 1 para. (1) that „economic operators carrying out related activities in the field of organization and operation of gambling, through a company registered in Romania or through a permanent establishment” will have new notifi­cation obligations to be observed, as detailed below. However, the draft continues to circum­stan­tiate each notification obligation using va­rious general formulations with reference to the entities to which the obligation is incumbent (“licensed class II economic operators”, “economic operators carrying out ancillary activities in the field of organization and operation of gambling in Romania”, “economic operators holding the class II license issued by O.N.J.N.”), without calling into question the criterion of the company’s presence in Romania (either through the registered office or through the permanent establishment), so that it can be argued that the proposed notifi­cation obligations are applicable to all Class II licensed entities in Romania, regardless of the jurisdiction in which they are registered.

More specifically, the draft order published in decisional transparency by ONJN provides that the class II licensed operators have the obligation to notify and transmit to the authority any agreement (regardless of its form) covering the provision of gambling-related services to B2C operators that do not have a class I license issued by ONJN,  within a maximum of 5 days from the conclusion of such an agreement.

Such notification must include: (i) the nature/type of the document, its number, date and duration (duration of the contract), (ii) the related activities that are the subject of the provision of services, (iii) the identification data of the recipient of the services (company name, registered office, country for which the services are provided), (iv) the type of game(s) covered by the services provided, and (v) the internet domains operated by the recipient of the services.

Moreover, Class II licensed operators must request from third parties (probably their B2C customers, operators offering services outside Romania, the notion not being defined in the current version of the draft order), other than B2C operators licensed in Romania, before starting the provision of services, a statement that the respective third party entity will not allow access to gambling organized in other jurisdictions to participants accessing the gambling platform in Romania and/or to Romanian citizens who do not have tax residence in another state. Such a declaration must be attached to the notification indicated above.

Without having carried out an in-depth legal analysis of this text, we note that, from a legislative point of view, it will be issued in the form of an order of the President of the ONJN, respectively a tertiary legislation which, accor­ding to the norms of legislative technique for the elaboration of normative acts, should only bring clarifications to the existing legal texts, not adding to them.

It can also be argued that there are conflicting provisions and (at least a partial) lack of clarity as regards the scope of the obligations of Class II licensed operators.

Any proposals or suggestions for amendments regarding the two draft orders published by the ONJN in decisional transparency could be submitted by the industry until August 2. We hope that the actions taken by the class II licensed entities, directly affected by the draft orders (especially with regard to the new notification obligations), will generate a significant improvement in the legal texts proposed for adoption.

WH Simion & Partners

Register of self-excluded and/or undesirable persons

Last but not least, it seems that ONJN intends to focus its attention in the coming period on the register of self-excluded players. Based on a press release recently published on the institution’s official website, ONJN emphasizes the following:

• The obligations regarding the prohibition of access and those relating to the registration and submission of self-exclusion requests apply to all gambling organisers, both for traditional and remote gambling activity
• The authority is carrying out a procurement process and will implement a system for the secure transmission of the record of self-excluded and undesirable persons, an infrastructure that will include the database created at national level in order to combat and prevent gambling addiction related to self-excluded and undesirable persons

We look forward to the legislative developments related to the aspects detailed above, confident that they will be beneficial for both players and industry players.