THE CHAOS CREATED BY REPEATED LEGISLATIVE CHANGES IN THE FIELD OF GAMBLING

“The higher the position held by an incompetent person, the more serious the social damage caused by their inadequacy”

by Lawyer Prof. Habil. PhD. Marius PANTEA

Lawyer Prof. Habil. PhD. Marius PANTEA

This statement highlights the danger of incompetence at higher decision-making levels, where errors have a multiplied impact on society. An unsuitable leader in a high position makes their inadequacy much more visible and causes considerably more serious social, economic, or administrative damage than an employee at a lower hierarchical level[1]. This is the harsh reality in the gambling industry in our country, due to the ill-considered measures taken by the government in recent times, transposed into the now famous reform packages, which effectively destroyed an industry just for the sake of the image that politicians project (that of defenders of people affected by gambling addiction), without any concrete results in the social field, but only damage to budget revenues and the abolition of licensed operators in favor of those who operate illegally.

To illustrate the legislative absurdities that have been implemented recently, I will present a few existing and future situations that have effectively destroyed the national land-based gambling industry.

A first problem raised by a convoluted provision, subsequently “supposedly” corrected, and which has become a real fiscal burden, concerns the payment of the contribution of licensed gambling operators to the ONJN [provided for in art. 10 para. (4) of GEO 77/2009], which in the case of slot machines can be paid up to 3 times in a single year. A concrete example would be the payment of €500 for a gaming device authorized on December 1, 2025, followed by a second payment on January 25, 2026, and then another €500 upon reauthorization in December 2026. This abusive scenario is based on a provision that establishes payment in relation to the calendar year, not the year of authorization, and the interpretations given by ONJN and MF officials are outrageous and detached from reality, without taking into account what the legislator intended when establishing this contribution, which is intended to supply a fund to prevent and combat gambling addiction.

Even though the ONJN consulted with the Advisory Council on this issue, the solutions offered were not adopted, which created a complicated situation, in the sense that at the first meeting of the Supervisory Committee in February, no request for authorization/reauthorization for any slot machine-type gaming device was included on the agenda, on the grounds that the tax due on January 25 had not been paid by the operators, even though the payment of the contribution is not a condition for reauthorization.

On the other hand, it should be noted that the legal provision in para. (5^1) stipulates: “The revenue collected from these contributions shall be used for … the prevention of gambling addiction, for activities and programs to protect minors or other socially and economically vulnerable groups from gambling, the prevention and treatment of gambling addiction, for advertising and publicity regarding the prevention of gambling addiction and the promotion of responsible gambling, … the national database created for the purpose of combating and preventing gambling addiction relating to self-excluded and undesirable persons …”, but the Romanian state, which initially “nationalized” these revenues and then decided to transfer 70% of them to the state budget, did not use even one leu of these sums for the purpose for which they were collected. As such, perhaps someone from the Public Prosecutor’s Office will notice that the conditions for committing the crime of “misappropriation of funds” provided for in art. 307 of the Criminal Code are met[2].

GAMBLING

A final, newly emerged issue is the introduction of a requirement to obtain a permit (local operating license from the local public administration authority in whose jurisdiction the activity is carried out) which traditional gambling operators must obtain from the administrative-territorial unit where they intend to carry out their operating activity. This new operating condition for gambling operators is “hidden” between the lines of a GEO[3] regulating the reform of central and local administration. An analysis of the amended legal provisions reveals a number of violations of existing rules, as follows:

1. Violation of the Romanian Constitution, namely the provisions of at. 115 para. (4)[4], in the sense that the Government did not justify the existence of an “extraordinary situation whose regulation cannot be postponed”. The Constitutional Court ruled in Decision 255/2005[5], that urgency must be justified by objective facts, not by the political will of the Government.

The provisions of art. 115 para. (6)[6] are also violated by restricting economic freedoms, namely by transferring authorization to the local level and imposing new taxes, the GEO seriously infringes upon: economic freedom (Art. 45 Free access to economic activity, free initiative, and their exercise under the conditions of the law are guaranteed), by creating discretionary administrative barriers, property rights (Art. 44) by introducing disproportionate taxes and the possibility of closing previously authorized locations, which represents a de facto expropriation of the gambling business.

2. Violation of the principles governing constitutional norms, in fact, violates the principle of fair taxation[7], by introducing a local tax in addition to national taxes (licensing and authorization, etc.), and the tax burden cannot be “fair” if it is double and if it varies from one ATU (administrative-territorial unit) to another for the same activity, creating discrimination between traditional gambling operators.

On the other hand, the principle of legal certainty is violated, given the vague provisions, without clear criteria, which leave room for arbitrariness on the part of local authorities. What happens if a national operator licensed by the ONJN is denied authorization on the territory of a ATU, given that at the time of obtaining the license, valid for 10 years, it could operate gambling anywhere on the national territory? This will certainly lead to an administrative deadlock, with significant financial losses. Who will bear these costs? The legal provision is ambiguous and unpredictable.

3. The Romanian government delegates regulatory powers in the field of state monopolies to local authorities, which contravenes public order and national security rules. Law 31/1996 clearly stipulates that “the administration of state monopolies is carried out exclusively by the Ministry of Finance,” not by mayors or local councils.
4. Violation of the provisions of the Services Directive – Directive 2006/123/EC – on services in the internal market, by constantly failing to notify TRIS of technical rules, and the latest GEO was not subject to this notification either, even though it establishes specific conditions for the provision of a service (geographical limitations, new local authorization criteria).

On this point, I quote in this article a paragraph from the EC’s response to the complaint made on this issue, which emphasizes: The Commission would like to recall that individuals may challenge the legality of alleged non-notified technical regulations before a national court. According to established case law, “failure to comply with the notification obligation renders the technical regulations in question inapplicable, so that they cannot be enforced against individuals.”. Thus, “individuals may rely on [articles 5 and 6 of Directive (EU) 2015/1535] before national courts, which are required to refuse to apply a national technical regulation that has not been notified in accordance with the Directive.” (judgment in Case C-194/94 CIA Security, paragraphs 54 and 55; see also judgment in Case C-336/14 Ince, paragraph 67 and the quoted case law).

In conclusion, on the date of the latest legislative amendment, February 25, which will effectively shut down traditional gambling through a deeply unconstitutional legal provision, the industry is at the mercy of local authorities (of mayors who are already making public statements about the closure of gambling activities in their areas of jurisdiction, see the statements by the mayors of Slatina and Braila), and legal gambling will be pushed into the black economy, where the state won’t collect any taxes and where addiction won’t be controlled by anyone. How such a regression was possible in an industry that contributed significantly to the state budget, what interests were involved, and why it came to this are questions that those who took such measures will have to answer at some point.

[1] Mihai Adrian Hotca, Cugetări despre inteligență, prostie și alte chestiuni, 09.04.2018 (Thoughts on intelligence, stupidity, and other matters), available at https://www.juridice.ro/essentials/2103/cugetari-despre-inteligenta-prostie-si-alte-chestiuni#:~:text=Cu%20c%C3%A2t%20

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[2]  Art. 307  Misappropriation of funds

• Changing the destination of funds or material resources allocated to a public authority or public institution, without complying with the legal provisions, is punishable by imprisonment of one to 5 years.
• The same penalty shall also apply to the change, without complying with the legal provisions, of the destination of funds from repayable financing, contracted directly or guaranteed by the state or by administrative-territorial units.
• Attempts shall be punished.

[3] GEO 7/2026 Emergency Ordinance amending and supplementing certain legislative acts, as well as adopting measures to increase the financial capacity of local authorities, published in the Official Gazette of Romania, Part I, No. 146 of February 25, 2026

[4] Art. 115 Legislative delegation

(4) The government may adopt emergency ordinances only in extraordinary situations the regulation of which cannot be postponed, with the obligation to justify the urgency in their content.

[5] DECISION No. 255 of May 11, 2005, on the referral of the unconstitutionality of the Law approving Government Emergency Ordinance No. 100/2004 on the transfer of certain forest lands from the public property of the state and from the administration of the National Forest Administration – Romsilva to the ownership of the Archdiocese of Suceava and Rădăuți

[6] Art. 115 Legislative delegation

(6) Emergency ordinances cannot be adopted in the field of constitutional laws, cannot affect the regime of the fundamental institutions of the state, the rights, freedoms, and duties provided for by the Constitution, electoral rights, and cannot concern measures for the forced transfer of certain assets into public ownership.

[7] Art. 56 Financial contributions

(1) Citizens are required to contribute to public expenditure through taxes and fees.

(2) The legal taxation system must ensure the fair allocation of tax burdens.

(3) Any other payments are prohibited, except those established by law in exceptional circumstances.