THE DEMONIZATION AND HUMILIATION OF THE GAMBLING INDUSTRY IN ROMANIA

Part 2

            The prolonged national political crisis is shaking Romania to its core,

Lawyer Prof. Habil. PhD. Marius PANTEA

subjecting the population and businesses to immense pressure, yet our political establishment seems completely uninterested in this “minor” issue. For our leaders, the following are important at this critical juncture: political egos, which must be satisfied at the expense of the national economy; the filling of leadership positions at all levels of power (ministers, secretaries of state, prefects, heads of decentralized agencies and central authorities, etc.); the formation of a government that serves only the party’s needs (regardless of the fact that the proposed ministers have no connection whatsoever to the fields they are supposed to oversee) and, last but not least, preparations for future elections (even if they are still far off) to capitalize on the electorate (duped by good intentions!!!) in the hope that they will secure a political future that ensures they continue to hold the reins of Romanian politics.

by Lawyer Prof. Habil. PhD. Marius PANTEA

As I noted in previous articles, the provisions of Emergency Ordinance no. 7/2026 established the requirement to obtain an approval / authorization issued by local councils as a prerequisite for the National Gambling Office (ONJN) to grant an operating license for gambling establishments. This requirement is in addition to the standard procedures carried out by the regulatory authority, while applications for authorization submitted to O.N.J.N. cannot be approved without the administrative decision issued by the local authority. The regulation of traditional gambling in the 148 local administrative units with a population of over 15,000 inhabitants (according to the 2022 Population and Housing Census) had a 60-day deadline (which has expired), and the local councils opted for:

1. A total ban on gambling (the first ruling by the Zărnești authorities, which also banned online gambling, was particularly notable);
2. A partial ban allowing for selective operation (only the National Lottery may operate lottery games, or, as a second option, the National Lottery and another type of game—sports betting) and/or a conditional ban (only in areas designated by the local council);
3. The fact that a decision has not yet been adopted (including in Bucharest).

Decisions made by local councils have begun to be challenged by licensed operators in administrative courts; the matter has been brought before the Competition Council; and, regarding the application of the vice tax, legal actions have been taken, including before the Court of Justice of the European Union. All the actions taken were predictable, given the unconstitutional manner in which the amendments to Government Emergency Ordinance no. 77/2009 were adopted, as well as the flawed interpretation of the provisions by local councils, which failed to understand that, in matters involving a state monopoly, they cannot exercise discretionary authority to halt a legally licensed activity.

As expected, the courts granted the suspension of the City Council’s decision, finding that the two conditions set forth in art. 14 para. (1) of Law No. 554/2004 had been cumulatively met; in this regard, we reproduce below the reasoning of one of the courts:

1. Well-founded case – the court identified, on a prima facie basis (without prejudice to the merits), three legal defects, namely:
2. Exceeding the limits of the authority conferred by the provisions of art. 18¹ para. (1) of Government Emergency Ordinance no. 77/2009. The local council could only decide whether or not to allow gambling within the local administrative unit. The general prohibition “except for the Romanian Lottery” goes beyond this framework, at least on the surface and in reality constitutes a partial exemption not authorized by law.
3. Violation of the principle of non-discrimination [as provided for in art. 16 para. (1) of the Romanian Constitution]. A single operator is allowed to carry out its activities without any apparent justification. The court expressly emphasized that, although the Romanian Lottery is governed by a separate legal framework (Law 31/1996), the local councils failed to specify which distinct legal framework justifies the exception – and thus the difference in treatment remains unjustified.
4. The lack of a specific justification for the act. Citing the case law of the High Court of Cassation and Justice (Decision no. 1444/2023) and art. 41 of the Charter of Fundamental Rights of the European Union, the court noted the dual role of the reasoning (transparency and judicial review) and found that there was no mention of the rationale for authorizing the activities of the Romanian Lottery – neither in the Local Council Decision, nor in the draft, the approval report, the explanatory memorandum, the expert reports or the opinions. The act appears to lack justification, constituting a defect of apparent legality.

The court rejected, as a separate ground, the argument regarding the failure to adopt the regulation (art. 18¹, para. (3)/Art. LII GEO 7/2026), holding that the regulation setting out the criteria was necessary only if it were decided to permit the activity, not to prohibit it.

The arguments regarding legislative technique (Law 24/2000) and the restriction of free access to economic activity were addressed in the considerations already set forth regarding legality and non-discrimination.

II Imminent harm—the court made an important distinction:

It rejected the alleged damages as pertaining to third parties (failure to pay taxes to the state, loss of employees’ jobs, termination of the property owners’ leases) – these are not damages caused to the plaintiff.

It recognized the plaintiff’s own financial losses as material, future and foreseeable damages that could not be remedied and that would result from the enforcement of the act.

On the other hand, the grounds cited before the Competition Council must be taken into account, namely:

1. finding of a violation of the provisions of art. 8 para. (1) let. (a) and (b) of Competition Law No. 21/1996 through the adoption, by local councils, of regulatory resolutions which—based on the authority delegated by Government Emergency Ordinance no. 7/2026 — prohibit the conduct of gambling activities in physical locations, while establishing specific exceptions in favor of a single operator (the National Company “Loteria Romana” S.A.) or a limited subcategory of activities (lottery and sports betting), with the exclusion of other nationally licensed operators.
2. The creation of two categories of anticompetitive effects: restrictions on the freedom of trade and the autonomy of licensed enterprises; and the imposition of discriminatory conditions by granting an operating privilege to a designated operator or an artificially defined subcategory.

Naturally, the Competition Council will have to promptly initiate an investigation pursuant to the provisions of art. 38 of Law No. 21/1996, and issue a decision finding a violation of the provisions of art. 8 para. (1) let. (a) and (b) and, ultimately, order the compliance measures provided for in art. 8 para. (2). If the local councils fail to comply with the decision issued by the Competition Council, the latter will be required to refer the matter to the Bucharest Court of Appeals [pursuant to the provisions of art. 8, para.(3) of Law No. 21/1996]. We look forward to seeing how the complaints filed will be resolved and what the Council’s position will be in this matter.

Finally, we reproduce the questions referred to Romania by the Court of Justice of the European Union on 22 June 2026, in connection with the action concerning the vice tax, which are as follows:

Questions for Romania:

1. What is the justification for imposing a vice tax on slot machine gambling, given that the responsible gambling tax provided for in article 10, paragraphs (4) and (5), of Government Emergency Ordinance no. 77/2009 is specifically intended to prevent gambling addiction?
2. Given that the excise tax on slot machine gambling is levied on the operators in question, rather than on consumers, to what extent can such a tax effectively influence consumers’ gambling behavior and, consequently, contribute to the protection of players and the prevention of addiction?

Questions for all parties:

3. The parties are invited to comment on the consistency and systematic nature of the national regulations in pursuit of the objectives cited by the Romanian government, given that online gambling, including slot machines, is not subject to the vice tax, unlike slot machines operated in casino floors.

Measures will certainly be taken to review the constitutionality of the legal provisions that have recently amended Government Emergency Ordinance no. 77/2009, given the serious harm caused to licensed traditional gambling operators. Statistically, the number of licensed slot machines has fallen from approximately 85,000 to fewer than 35,000 at present (of which only about 20,000 are operational), causing the state to forgo significant revenues that were previously collected into the consolidated budget and opening the door wide to their illegal operation and the shift toward unlicensed online gambling.

The mistakes made by those who took such measures, which the still-interim government has not taken responsibility for, in the current situation (with bottlenecks throughout the economy and limited revenue for the state budget, along with increased taxes and amid a massive economic crisis), should perhaps be analyzed by the future government and perhaps those who will lead in the future will no longer allow money to flow out of the country through unlicensed online gambling (approximately 150 million euros annually – through the banking system alone) and will limit these seemingly deliberate losses. At this point, the state has lost over 320 million euros in state budget revenues and thousands of affected jobs. Specifically, over 1,300 closed locations, approximately 8,500 affected jobs, 120 million euros annually in direct taxes that can no longer be collected, and another approximately 200 million euros annually representing taxes related to the gambling operation activity.

As I have shown in previous articles, the social impact of the measures taken is virtually nonexistent, because the closure of dedicated gambling venues in local communities will not limit participation in gambling but will only force a shift toward unlicensed online gambling sites operated by companies in other countries, which do not care if minors participate (since all it takes is a simple checkbox to join) and which do not pay a single leu to our country’s state budget.