Sebastian Ionescu, President of ONJN: The gambling industry in Romania is stable and mature

Friday, 8 March 2019

The gambling industry contributes substantial amounts of money to the state budget

With the emergence of the new charges decided by the Government in Government Emergency Ordinance (GEO) no. 114/2018 by the end of last year, and the issuance of Order no. 38/2019, published in the Official Journal no. 120 of 15 February 2019 and providing for the calculation of the monthly charge under Article 53 of GEO no. 114/2018, we thought our readers would be interested to learn further information directly from the competent authorities from a most interesting dialog we had with the President of the Romanian National Gambling Office (ONJN), Mr. Sebastian Ionescu, who was kind enough to give us this interview.


Sebastian Ionescu

How do you expect the gambling operators across the country to be affected by the new taxation levels provided under the Emergency Ordinance 114? Have you been able to notice any changes at all with regards to the number of licensed machines or other economic/statistical indicators in the 2 months since the increase in the charges?


I propose that we be positive about the changes made in the gambling industry. This is a stable industry at present and the new charges decided by the Government in GEO no. 114/2018 have not brought significant changes such as, say, a decrease in the business of the gambling operators. Considering the dynamics of this industry and the fact that a licensing cycle will take a whole year, a more accurate analysis could be made after such period elapsed. According to the initial survey conducted before the amendments were brought, the impact of same is not substantial.


Do you expect any more impeding legislative changes that would affect the gambling industry in our country?


The relevant legislation will incur no significant changes in the near future. However, let us not forget that some amendments are most welcome for they are to improve the current legislation and create a competitive environment for the organizers.


Do you believe the preconditions were met for a “black market” extension? Would certain operators feel tempted to operate undeclared machines? What course of action will you take to prevent these practices?


With the implementation of the new provisions, the industry will adapt, naturally, to the new regulations. The law requires responsibility and seriousness and whoever may wish to do business the right way will get full support from the state institutions.
The Romanian National Gambling Office, within its powers, will con­tinue to carry out actions through its specialized direc­torates to discourage any illegal practices, and would like to draw attention to the fact that any misconduct with regard to the specific legislation shall be sanctioned according to the regulations in force.


ONJN issued Order no. 38 on the taxation of the gambling organizers, so I would like you to do a brief review of how these tax measures will become effective and are to be implemented.


Order no. 38/2019 published in the Official Journal no. 120 of 15 February 2019 provided for the calculation of the monthly charge under Article 53 of GEO no. 114/2018.
This monthly charge is obtained by charging a 2% ratio from the total worth of the participation charges collected each month, according to the legal provisions in force. The total amount of the participation charges collected each month will be defined as any transfer from a bank or similar account of the players to their gambling accounts on the gambling platform. This charge is calculated, reported and payable to the state budget up to and including the 25th day of the month following the one in which the monthly participation charges were collected, according to the legal provisions in force. On 21 February 2019 the National Agency for Fiscal Administration published the amendments to Order no. 587/2016, in which are detailed issues pertaining to the extinguishment of these duties.


What was the amount of gambling charges collected by the state in 2018? How would you qualify 2018 from this perspective?


In 2018, the charges on the economic operators carrying out gambling activities and related activities on the territory of Romania amounted to a total of EUR 320 million. The level of collection is a very high one, over 90%, with the remaining percentages accounting for other legal situations, i.e. insolvency or bankruptcy. From this perspective, last year saw no significant increases to the previous years.


What are the Romanian state’s expectations with respect to the amount of the charges to be collected in 2019 following the new taxation levels?


The gambling industry in Romania is stable and mature. We are discussing about an industry with major ramifications, on budgetary revenues as well as on a social level. The gambling industry contributes substantial amounts of money to the state budget, not only by taxes and charges for licensing and permitting, but also by revenues from related activities.
The charges established by the Government in GEO no. 114/2018 shall generate higher revenues to the state budget. At this point, there are around 70,000 authorized slot machines, a EUR 1,000 amount to be added to each one, you do the math, and take into account that the bonus, namely the 10% discount from the amount payable as gambling exploitation permit for the payments made in advance, for the entire term of validity of the permit, has already been eliminated.
We should also consider the remote gambling charges which, while not accounting for a substantial portion from the total amount of the charges collected, may be regarded as additional revenue to the state budget. This amendment was aimed to create balance across the gambling industry.


Which are the most important projects of ONJN in 2019?


Our major project this year is to initiate these programs I was telling you about: protection programs for the young and the players, programs to prevent gambling addiction and, not least, programs to settle any litigations likely to arise between the gambling operators and players. After a long time, we have managed to set the course for new activities, with the amounts collected therefrom to be used to promote observance of the principles and measures raising gambling awareness. We would like to take this opportunity to invite all the associations in the field to support this activity by solid proposals of procedures and projects to make this activity compliant with the realities in this industry.
The promotion of a responsible attitude toward gambling and the provision of a stable and correct environment for the performance of the activities by actions of control conducted by the specialized departments will also remain our top priorities.

Author: Editor

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