OBLIGATIONS OF CLASS II LICENSEES AND SANCTIONS IN CASE OF NON-OBSERVANCE

Tuesday, 10 March 2020

by Nicoleta BĂRĂGAN, Associate Lawyer, LUCA Mihai Cătălin L.O.

Identifying the obligations incumbent to the class II licensees and the corresponding sanctions in case of non-observance has proved to be a slightly difficult task for both the economic operators and the Law practitioners.

In most cases the legal regulations in the field of gambling expressly provide the sanction in case of non-observance of a certain obligation, but there are also situations in which the legal regulations establish an obligation/prohibition for the class II licensees and do not provide a clear sanction in case of violation.

We will present below several examples from both categories mentioned.

  • According to art. 1 thesis II of the Methodological Norms for the implementation of the Government Emergency Ordinance no. 77/2009 on the organization and operation of gambling (hereinafter “the Methodological Norms“), the conduct of ancillary activities in the field of gambling is allowed to the economic operators holding the class II license, issued by the National Gambling Office.

The performance of these activities without holding an appropriate class II license represents an offense, according to art. 23 of the Government Emergency Ordinance no. 77/2009 on the organization and operation of gambling (hereinafter “GEO no. 77/2009“), punishable by imprisonment from one month to one year or by a fine.

In addition, it is necessary to mention that, according to art. 30 of GEO no. 77/2009, the penalty applied to the legal person for committing the offenses provided by GEO no. 77/2009 is the fine varying from 10,000 lei to 100,000 lei and the complementary penalty of dissolution of the legal person. Also, for the criminal offenses provided by GEO no. 77/2009 there are applicable the provisions of the Criminal Code regarding special seizure.

  • According to art. 26 paragraph (2) of GEO no. 77/2009, the performance of marketing, publicity, advertising or of any other promotional activities regarding the ancillary activities and services in connection with gambling games that are not authorized in the territory of Romania or the performance of these activities without observing the provisions of art. 12 of GEO no. 77/2009 (which regulates aspects regarding promotion and advertising for gambling games authorized in the national territory) represents a misdemeanor and is sanctioned with a fine from 50,000 lei to 100,000 lei and the seizure of the amounts derived from such activity.
  • Another obligation incumbent to the class II licensees relates to the presentation of the company director or of another person who was summoned by ONJN inspectors, within two working days, to clarify issues related to the ongoing checks in the field of gambling. For this obligation also, it is regulated an express sanction under art. 261 paragraph (2) of GEO no. 77/2009, which stipulates that the non-observance of such obligation constitutes a misdemeanor and is sanctioned with a fine from 5,000 lei to 25,000 lei.
  • 21 paragraph (6) regulates a general prohibition, which also applies to economic operators who carry out ancillary activities in the field of gambling. Thus, the partners of the licensed gambling organizer, with whom they are in an interdependence relationship (that is, including the class II licensees with whom the gambling organizer has a contractual relationship) cannot participate in the gambling organized by the respective organizer.

Failure to comply with this prohibition constitutes, according to art. 261 paragraph (4) of GEO no. 77/2009, misdemeanor, being sanctioned with a fine from 1,500 lei to 5,000 lei.

  • Also, according to art. 10 paragraph (7) of GEO no. 77/2009, the class II licensees have the obligation to observe the decisions of the Supervisory Committee of ONJN, obligation whose non-compliance constitutes a misdemeanor and which is sanctioned, according to art. 22 paragraph (5) of the same legal enactment, with a fine from 50,000 lei to 100,000 lei.
  • Under art. 17 paragraph (91) it is regulated the possibility of the ONJN Supervisory Committee to suspend the activity of the gambling organizers or of the economic operators holding the class II license, at the reasoned proposal of the specialized directions of the ONJN, until the cessation of the situation that generated the suspension.

However, in relation to the class II licensed operators, the regulations do not establish which are the reasons that could lead to the decision of the Supervisory Committee regarding the suspension of the activity of this category of economic operators. This legislative gap may lead to abuses from the competent authority.

Given that for the gambling organizers there are expressly regulated the obligations whose breach/non-compliance leads to the possibility of applying by the authority the measure of suspension of activity, de lege ferenda, we consider that such should also be expressly regulated for the class II licensees.

  • 20 of GEO no. 77/2009 regulates, among others, (i) the way of declaring to ONJN and of carrying out specific transactions/operations with gambling equipment on the territory of Romania – by the class II licensed economic operators that carry out production, distribution, repairing and maintenance activities for gambling equipment, import, export, intra-Community acquisition, intra-Community delivery or other similar of gambling equipment, for the purpose of their marketing or use, under any form, on the territory of Romania – as well as (ii) the obligation of the economic operators who carry out ancillary activities in the field of online gambling in Romania to hold a license from the Supervisory Committee of ONJN for carrying out the activity.

Under art. 22 paragraph (2) of GEO no. 77/2009 it is regulated that the non-compliance with the obligations set under article 20 constitutes a misdemeanor and is sanctioned with a fine from 50,000 lei to 100,000 lei, and the respective gambling equipment and/or the amounts derived from the related economic operations, as the case may be, are seized.

Although it refers in a generic way to the non-compliance with the obligations set under art. 20, from the wording (“and the respective gambling equipment and/or the amounts derived from the related economic operations, as the case may be, are seized“) it results that this sanction is only applicable for non-observance of the obligations regarding the way of declaring to ONJN and of carrying out transactions/operations with gambling equipment on the Romanian territory, and not for the non-observance of the obligation to hold a class II license for conducting ancillary activities in the field of online gambling in Romania.

As detailed in the first part of the article, the conduct of any of the activities in the field of gambling (including of ancillary activities in the field of online gambling) without a license or authorization represents an offense (art. 23 of GEO no. 77/2009) and is punished with imprisonment from one month to one year or with a fine.

  • A specific example of provision that establishes obligations/prohibitions for the class II licensees, for which, however, an express sanction cannot be identified in case of non-compliance, is represented by art. 150 paragraph (3) of the Methodological Norms. This article establishes the following prohibitions: (i) it is forbidden for the conformity assessment body to issue verification marks, type labels or seals, or any other documents, without carrying out the verifications provided by the legal provisions in force; (ii) it is forbidden for the certifier/auditor to issue documents attesting aspects non-conforming with the reality; (iii) it is forbidden for the affiliate to not communicate to ONJN, within 15 days from the conclusion date, the affiliation contract concluded with a remote gambling organizer.
  • Another example in this regard is represented by art. 148 of the Methodological Norms. It is expressly provided in para. (2) of this article that the fees related to the class II license should be paid, for the first year, until the 25th of the month following the one in which the documentation submitted by the economic operator was approved, and for the following years, with at least 10 days before the one year period is over.

Under para. (4) of the same article, it is only regulated the sanction for not paying on time of the license fee correspondent to the first year of validity, namely that the approval decision will not take effect, without any other formality.

Thus, the legal regulations do not provide for the sanction applicable for not paying on time by the class II licensees of the license fees correspondent to the following years of validity.

We mention that, in similar situations, the authority acted in this respect by reference to the sanctions applicable to gambling organizers for non-payment of the license fee on time, including by reference to the application of the measure of license revocation, regulated by art. 17 paragraph (2) lit. a) of GEO no. 77/2009.

Last but not least, in regard to the misdemeanors provided in GEO no. 77/2009, it is expressly regulated the applicability of the provisions of the Government Ordinance no. 2/2001 on the legal regime of misdemeanors.

Author: Editor

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