Tag Archives: ONJN

DAN ILIOVICI, ONJN President: “I want a responsible industry, adequate player protection, observance of the legislative framework”

Dan Iliovici

We offer you an interview with the President of the National Office for Gambling (ONJN), Dan Iliovici. I have invited him to offer us a clearer picture of the gambling field’s situation and to offer us as much current information and information of interest for all actors on our market, as possible.

 

What issues were you confronted with once having taken the position? Are there still issues that you face while exercising your attributions?

 

Issues?! An abrupt introduction… I’d rather name them “challenges”.

Think about someone who has worked (for what seems like a life-time) in the so-called “private environment” and who, overnight, moves to work for the state. The difference are significant, to not say huge, starting from aspects related to organizational culture and finishing with restrictions – firstly those related to budget. There are also aspects related to mentalities…

There are no insurmountable issues. The only issue is that, sometimes, I have experienced a sense of getting stuck, of running through water.

However, my enthusiasm has not eluded me. I want a responsible industry, adequate player protection, observance of the legislative framework.

 

How did the gambling industry in our country look in 2017?

2017 was a “normal” year. We have had stability with regards to the legislative framework specific to our industry, stability with regards to the market. The most important development was with regards to the on-line gambling segment, where we reached 21 operators in December 2017.

This is a small picture of the industry, in figures:

  • 68,025 authorized slot machines
  • 3,521 AWPs – authorized limited win machines
  • 13,335 authorized betting agencies / 25 fixed quota betting operators
  • 377 class I licensed gambling organizers
  • RON 1,314,331,000 total gambling taxes doe 698 economic agents (licensed class I and II)
  • 1,224 resolved petitions
  • 13,093 control actions – RON 9,576,000 in fines

 

How would you characterize our gambling industry? Is it a mature industry, a growing industry…? Why?

 

I underlined countless of times the fact that the regulation of the gambling field in our country is given as a good-practice example at the level of the EU states. The manner of organization and functioning of the authority responsible for managing the industry, OJNJ, is also appreciated, and the market “response” fits the bill: we have an organic development, a competitive, stable market, with clear regulations and transparent procedures. There are positive aspects, kept in mind by any investor, regardless of the industry.

I am not saying that all if well, or that there aren’t things that can be (and should be) improved. Including with regards to the Office’s activity. But I want to assure everyone of our good faith and to stir toward a constructive approach of the differences, of points of view which sometimes seem irreconcilable. We request an industry-authority partnership. The gambling market sees a continuous dynamic, especially with regards to technology, and we expect an organic development, which shall “keep up” with this evolution.

 

Can it be said that in Romania, today, there are still games “played under the table”? (If yes, please offer us a few examples that you have discovered upon taking the position).

 

We believe that the black market has seen a significant drop due to the adoption of the new legal framework. From zero licensed on-line gambling operators before 2015, we have reached over 20 today. So, in fact, the on-line market has been opened.

With regards to slot machines operated without a license and/or operating license, we have benefited from the aid of operators who function legally, those who have signalled locations where there were clues of machines being operated without a license. Anyone who organizes black market gambling represent an disloyal competitor to those paying taxes and fees provided by law.

Furthermore, the players have understood the fact that it is illegal to participate in unauthorized games and that they benefit from protection only if they play on legal sites.

As a result of inspections performed in 2017, 241 means of game have been indisposed, representing 205 slot machines, 26 on-line slot machine terminals and 10 poker tables.

 

Here, I believe, something should be duly noted: if the gambling industry is not regulated, or if it is poorly regulated, and the operators wish to operate illegally on a market, they will face impediments (walls) which shall render their activity inefficient from the perspective of all legal requirements, then the respective market shall face an ample black market gambling phenomenon.

 

Regardless of the regulation method, the request for such activity/fun exists. People want to play – they have wanted to do so from ancient times, and they shall certainly continue to do so in the future. However, it is important that those offering this service – organizing games of chance – to be able to do it legally, responsibly, based on clear, equitable, applicable regulations. And the market needs to be supervised, monitored, controlled by an independent authority.

This is the optimal framework which can ensure the education and protection of players, efficient tax collection, a competitive market, socially responsible.

 

From your point of view, which are the main achievements since you have become president of the ONJN?

 

You know my concern with minor protection, for preventing and treating players with gambling problems, all that we call Responsible Game. With regards to this, I believe the most important achievement is elaborating and publishing the Code of Ethics for responsible communication in the field of gambling.

I would mention here the Office’s complete openness toward an efficient communication with the players, with the plaintiffs. These, as well as the operators, benefit from hearings at any time, nobody is refusing them.

We conduct several inspections, more on-line checks, players have started to know their rights and to find out that there is an authority which regulates this market and which they can address at any time.

 

Do you believe in the possibility of increasing the number of operators and the number of machines? How about the number of on-line gambling operators?

 

The market is open and we share the desideratum that competition is beneficial, regardless of the industry. This is beneficial for the consumers, players as well.

We believe that we shall see a constant development in the on-line area, both due to technological evolutions, but also due to the attention that conventional gambling operators (landbased) pay to diversifying the on-line market.

Finally, this is a wish pertaining to the responsible game, the phased transformation/migration of slots located in conventional gambling locations (slot machine halls and/or betting agencies) to AWPs, electronic machines which attribute limited risk winnings.

 

In February, ONJN launched The Code of Ethics for responsible communication in the field of gambling. Please tell us which are, from your point of view, the most important rules within this document?

 

Here, I would like to begin by stating loud and clear two things:

 

Firstly, the legitimacy of publicity in the field of gambling. We are not for abrupt, radical decisions such as prohibiting publicity for this industry. Publicity also has the role of channelling the players toward activities conducted legally, it has a protective role.

 

A second important aspect with regards to gambling, including the manner in which publicity if made – commercial communication, in the vast sense: everyone must respect certain principles, in the sense of social responsibility and responsible game. Or, this is the exact purpose for which out Code of Ethics for responsible communication came to be, in the context in which everyone agrees to the principles, and issues arise upon their implementation.

The Code of Ethics offers a guide, a guideline with the purpose of those mentioned above. It is not compulsory, no sanctions incurred, it is a live project, subject to debate.

 

The entire set of provisions is essential to a responsible commercial communication within this sensitive field of gambling.

 

How did the gambling operators react to The Code of Ethics for responsible communication in the field of gambling?

 

We have seen to types of reactions:

The first reaction came directly from the operators. They said that it was a good move on the Office’s part, that they will pay due consideration to the document, will provide amendment proposals and shall go along with the proposed idea, in the sense of voluntary compliance.

We had warned the market in time that the ONJN will not stand aside with regards to regulating publicity. For a long time, we have considered the issuance of an order of the president of the ONJN, which would comprise clear, concrete provisions with regards to the manner in which commercial publicity/communication can be performed (and CANNOT be performed) within this field.

 

Then we found several sociological studies, including papers from our country, which underlined the fact that the degree of compliance is a lot higher in the case of guidelines/codes where those involved are called upon to willingly adhere, than in cases with imperative provisions, sanctions, terms etc.

So, we chose the first option. We shall see, after a reasonable period of time (a year), what are the results. How many will have adhered, how the media environment presents itself, what feedback we receive from the public, and then we shall establish the following steps to be taken.

 

The second type of reaction was somewhat more vehement, and came from certain representatives of gambling operators. It went as far as requesting that the document be withdrawn – Code of Ethics – from the Office’s site. We reiterated our argumentation and promotion of the code, came up with new arguments… We succeeded in overcoming this situation and using an approach in the sense of those described above.

 

What are your plans for the future with regards to the industry that your are leading as President of the ONJN?

 

There are more to be done as to prevent and decrease the negative effects of excessive gambling. I am mainly referring to creating the fund and foundation for socially responsible gambling, for the prevention and combat of addiction. I hope that we will hold an interview on this matter soon enough, as soon as we shall have the two institutions up and running.

 

Please send a message to our industry. An incentive addressed to all, not just the companies in the gambling industries:

Get involved in social projects, get involved in the life of local communities. Not just through sponsorship, by showing the name of the one who participated to a certain project. Do it discretely, not as a form of pride or an (indirect) form of publicity. This is also a manner in which you can change the negative perception that our industry still “enjoys”.

Thank you!

Editorial – Here you can find everything about gambling!

by INSIDER

The May edition of our magazine comes with concerns in the business area regarding the future legislative framework and new ideas and trends in the operating area. As you well know by now, here you will find everything about gambling!

The Cover Story proposes a corollary of the actions undertaken lately by the Romanian Bookmakers – The Patronage of Betting Organizers in Romania, in their effort in determining the achievement of certain objectives which are undoubtedly necessary for profile operators.

Their concerns arise from the need to elaborate a new industry Code of Ethics in relation to the provisions under the General Data Protection Regulation, which shall enter into force this month, but also with regards to the new regulations regarding combating money-laundering. We invite you to find out about other stakes and activities that the Romanian Bookmakers undertake in the article dedicated to them.

One of the surprises within this number comes from Craiova, where a strong Romanian company which, in almost 20 years of activity, through seriousness, perseverance and skill, has succeeded in developing a successful business in the field of gambling. Their halls, KM Games, represent an important point of reference in the field of entertainment, which is pretty competitive in the area. Kamaryon, because it’s them we are referring to, started out from the idea of a few enthusiastic young people who wanted to make a better future for themselves, on their own, and who have now reached the point of decisively contributing to the future of others and to offer support to the community. I recommend that you carefully read this interesting interview with Karmen Ciorăscu, the company’s owner, as to see what their recipe for success is.

Also within this edition, we offer you an interview with the President of the National Office for Gambling (ONJN), Dan Iliovici. I have invited him to offer us a clearer picture of the gambling field’s situation and to offer us as much current information and information of interest for all actors on our market, as possible. If you read this interesting material, you will find out our industry’s most important figures and which are the ONJN’s concerns under Mister Iliovici’s mandate.

We propose a preview of the EAE’s 12th edition which will be held this year between 3-5 September at Romexpo Exhibition Centre, by holding an interview with Anton Vlad, the organizer of this exhibition, traditional in the gambling industry. The main new novelty in the 2018 edition is represented by the new hall within the exhibition centre, space which shall allow organizers to carry out an event of truly international proportions, starting with this year.

 

Adjacent to our specific entertainment area, we continue our series related to places where you can eat well in Bucharest. The well-known restaurant critic and gourmet, George Butunoiu, has recently arrived at one of the most beautiful trattoria restaurants in Bucharest – Il Villagio and Aqua Garden – a great restaurant of Militari neighbourhood, of the new Militari Residence neighbourhood, to be more precise. We invite you to find out what dishes he tasted and what he thought of the two locations described in this edition.

ODETA NESTOR: “All those in the field want stability”

One year after having left her position in front of the National Office for Gambling (ONJN), we believed it was opportune to once again have in the pages of our magazine the president of the institution, Odeta Nistor. Now we have the chance to find out more of her opinions with regards to what is happening on the market, the projects she was involved in, including that regarding the approval of source-based taxation of earnings from gambling and on-line betting, future plans and many more.

A year has passed since you left your position as president of the ONJN, please tell us if you are happy with what you have accomplished during the time spent as the president of the Office and which you believe are your most important accomplishments during your mandate?

Of course I am. Firstly, because I have built an institution and created a team from scratch, starting from a resolution that appointed me in public office and from an office which, in fact, was a room with two desks, located on the ground floor of the Ministry of Public Finances. I have left this functional institution in the best parameters possible, with 180 employees, with an envied location, new cars, a functional legislation and last, but not least, an institution appreciated by all those who have heard of the ONJN, both nationally and internationally. I mention this by making reference to our results, which can be found within the institution’s activity reports, but also in the Court of Accounts’ reports, which has verified the institution’s activity during the time I managed it and within which, as opposed to many other public institutions, no irregularities were registered due to management or employees.

Secondly, during my mandate as president, I proposed legal and institutional measures and mechanisms which regulate in a more efficient and coherent manner the gambling market in general, thus responding to the market dynamic both for operators and players, and for other market actors as well (providers of equipment and services related to the gambling field).

Thirdly, compared to other European states, we succeeded in successfully regulating the illegal area of the gambling market, respectively on-line gambling, and to collect significant amounts to the state budget from penalties paid for the period in which the operators did not hold a gambling license. This regulation adopted by Romania is appreciated by the market operators and is given as an example of good practice at almost every international conference, as being a very good regulation in the field.

Please tell us, what projects have you been involved in since you left the Office and until today?

Given the experience and results achieved as the head of the ONJN, subsequently to changing my position, I was asked to run the Association of Remote Gambling Operators in Romania.

During my personal time, I carry out consultancy activities in other states in Europe, Africa and America in the field of on-line gambling, as well as with regards to monitoring and control strategies for the entire gambling field.

What are the main issues you have dealt with after having taken the President position within the Association of Remote Gambling Operators?

Decision-making is the most difficult process as any proposal or request must be substantiated, sent to the operators within the association and then a commonly accepted formula must be found. Sometimes, the operators’ interests may differ between the small and the large operators, or between different activities, poker, betting, casino. Sometimes the business models or perspectives of the companies are completely different, especially given that on-line operators are large companies which operate within multiple jurisdictions, having different strategies depending on them and the existent legislation. My role is very important, of explaining, with arguments, to all members, how the Romanian market works, which is the legislative interpretation and to succeed in convincing them in having a unitary final proposal. Adopting a common line proves to be the most difficult.

A great win in the lives of betting and on-line gambling consumers was the approval of source-based taxation of earnings from on-line gambling and betting. Was it difficult for you, as representative of the on-line gambling operators, to obtain this amendment of the tax code?

I made this proposal from before the time I was managing the ONJN. All this time, I have supported this amendment as I was convinced that it is a proposal from which all parties implicated win, the state, the players and the operators. The players will no longer have to keep record of their winnings, to line up at ANAF, the operators won’t lose clients as a result of erroneous reporting followed by extremely high penalties, and ANAF will no longer have to process all of the players’ statements, as they are reported by the operators and paid on a monthly basis by them. Then, all of this is verified by independent auditors. It no longer matters if it was difficult or not after you succeed in achieving your goal. By means of my experience at the ONJN, I understood how the legislative process functions and the decision factors at that time and those of today have started to trust that what I propose for amendment produces positive effects and each time, I have presented legal arguments, so that my proposals materialize and be assumed by those who approve them.

Are the operators prepared for this legislative change? How much time do they need to adjust their systems and to prepare for these amendments?

The association I represent does not have the situation of all market operators. The future will show us how this amendment shall function. Certain operators are ready, as we have held discussions with them since the proposal was made in Romania’s Senate. Normally, the amendment, as an ethical procedure, is not difficult. But depending on the technical structure of the equipment of each operators and on the chosen solution, it is possible that recertification of gambling or security systems, of platforms used, be needed. On behalf of the Association, I officially requested the Ministry a 6 months implementation term, but this has yet to be assumed within the GEO, as Emergency Ordinances must be substantiated as to why they are urgent, or the 6 months terms within it has not been approved.

For a rather long time you were the head of the ONJN, that is “you worked for the state”, and now, you are on the other side of the “barricades”, the head of the Association for Remote Gambling Operators; what are the main issues you face?

Honestly, I believe that at the ONJN, work (so to speak) is no longer performed at the same intensity and the resolution of operators’ issues are delayed. But it might just be a subjective opinion. Although, most of the operators I discuss with tell me the same thing. But I can surely give you a few examples. Even though the law has yet to be amended, the operators receive opinions and requests on behalf of the ONJN which are absolutely contrary to those received during my mandate in the context in which these are the same employees, from the directors down to the last employee, who issued opinions then and are issuing them now, as the president does not sign on his/her own. This has no other explanation other than that, during my mandate, they issued illicit opinions or are now abusing the situation by interpreting the law in a different manner. These situations are more and more frequent, which leads to operator instability, and for those in the on-line environment, who have legal departments in other countries, it is very difficult for me to explain that, on the basis of the same law from the same institution, there are two legal opinions, even if the law has yet to be amended. I find myself in the situation in which I have no arguments with which to explain to them that this year, they will have another tax to pay, other than that of the past years, and if they don’t pay it at the level now requested by the ONJN, there is a possibility that the authorization may not be approved in the same legal conditions. The law stipulates that regular meetings be held between associations of operators in the field and the ONJN as to debate market issues; my information tells me that this no longer happens.

Which do you believe are the primary issues with which the Romanian gambling industry, in its entirety, is confronted?

There have always been, are and will be issues on the market as in any other field, there is no doubt about that. This situation is mainly due to the field’s dynamic, technology development and integration mechanisms, and the multitude and diversity of the games conceived. In my opinion, the main issues is that of the degree of professional training of those assessing this field. Without a proper training of those who apply the law as to approve the functioning of different types of activities or games or those who actually control it, the general results for the functioning of the field cannot be the best.

Where do you see the Romanian gambling industry in the next 5 years?

In Romania, in the current context, I do not believe there will be any major changes. Surely, there are still things to be done, but they are not of great magnitude. More related to correlation and “fine agreement”, to put it this way. All those in the field want stability.

 

What are your plans for the future, from a professional point of view?

As president of the ONJN, I came from the gambling field and I returned to the same field. However, with a lot more experience. Personally, I can’t do anything else than continue to activate by offering specialized consultancy or by actually participating in the construction of projects at strategy level for certain unregulated countries, offering as example what I have achieved in Romania, and that is my business card. I was pleasantly surprised to be requested in countries in which I had never thought I would get to see even as a tourist, countries with a very high financial potential and with issues in the gambling field which they do not know how to manage as they lack specialists in a niche field such as gambling. The gambling field is a very technical one. But it function all over the world. Once you’ve understood it, you can apply it and develop it anywhere in the world.

Editorial – On gambling news

by INSIDER

In this edition we have a lot of exciting topics that will surely awaken your interest, especially as they look at gambling news.

In our Cover Story we find one of the leading operators in our field. The Jack Ploiești gaming room was designated last year by our magazine as the best gaming room outside the capital. In 2018 they prepared a few promotional campaigns with sensational prizes, repaying the loyalty of customers who trust in the quality of the services we offer, but also of the top generation gaming means that they find here each time. The total prizes prepared by The Jack Ploiești this year exceed the value of RON 1,500,000! Learn more about the 2018 Campaigns and the surprises prepared by The Jack Ploiești by reading the material dedicated to them.

Another material that we strongly recommend to you is about another winner of ours, Game World Bucharest Mall. The largest Eastern European gaming room continues to be a destination for great fun and to diversify the attractions and entertainment options offered to its guests. For example, during 2017, customers of this emblematic gaming room were invited to have fun at no fewer than 56 themed parties involving various shows, decors and culinary dishes, organized with professionalism and enthusiasm by Game World Bucharest Mall. For 2018, they are preparing many other memorable marketing campaigns that will dazzle us, especially since this location will go into its 20th year of operation.

One year after having left her managerial position in the National Office for Gambling (ONJN), we believed it was opportune to once again have in the pages of our magazine the president of the institution, Odeta Nistor. Now we have the chance to find out more of her opinions with regards to what is happening on the market, the projects she was involved in, including that regarding the approval of source-based taxation of earnings from gambling and on-line betting, her future plans and many more.

We are sure that you remember that on December 7, 2017, the National Supervisory Authority for Personal Data Processing held a presentation at the professional gambling business event organized by the Casino Inside magazine – RPG 6, where issues were debated with regard to the conditions for the processing of personal data by private legal entities in this field as operators in the context of the (EU) Regulation 2016/679 on the protection of individuals with regard to the processing of personal data and on the free movement of these data and repealing Directive 95/46/EC.

Our intention is to start a series of GDPR articles to provide you with as much information as possible on this topic. We considered that we should first provide you with as much information as possible about the Personal Data Protection Officer that you should appoint.

The (EU) Regulation 2016/679 on the protection of individuals with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46/EC (General Data Protection Regulation) is to be applied in all Member States of the European Union as of May 25, 2018. Not long from now, the provisions of this legislation will have to be applied to our entire field.

Enjoy!

The Code of ethics on responsible commercial communication – beta version?

by Alina Dumitru and Andrei Cosma – NESTOR NESTOR DICULESCU KINGSTON PETERSEN

Alina Dumitru

In previous articles, we reviewed a series of regulatory initiatives or draft laws that, in the event of their

Andrei Cosma

entry into force, would generate a strong impact for the local gambling industry. However, all these lex ferenda proposals did not come from the gambling regulator, but from other authorities whose scope of competence extends also to the gambling sector. Nonetheless, in this issue we have the opportunity to make a short overview of a “pure blood” approach whose author is  the National Office for Gambling (“NOG”) itself.

Thus, on February 14, 2018, the NOG published on its official website the Code of ethics on responsible communication in gambling (“the Code”). Inherently, any official attempt or position expressed by the NOG requires, as a preliminary technical examination, the determination of its legal nature and the effects it generates. This examination proved to be tortuous (to say the least) because, if the preamble to the Code states that it is “a set of self-regulatory norms” (although self-regulation, as a rule, entails a wholly different legal regime than the mere adoption of a unilateral act  by a public authority), in the last section of the Code it is concluded, within the first paragraph, that the actors involved in the gambling sector “adhere freely” to the set of rules created, but, in the following paragraph, it is stated that the rules contained in the Code “are complementary” to the legal framework in the field of commercial communications.

A first official position regarding the legal force of this Code was expressed in the meeting of the NOG’s Consultative Committee organized on February 22, 2018, where the authority’s representatives stated that the document in question is purely consultative in nature and does not constitute an instrument for applying sanctions for possible violations of the rules/standards illustrated in the Code. Within the same meeting, it was agreed that the parties involved in the industry shall submit proposals for the amendment of the Code.

However, in the announcement published on NOG’s website on February 26, 2018, following the meeting of the Consultative Committee, the invitation to propose amendments is no longer included, but, instead, the authority addresses the proposal to the operators to “assume” the Code.

Even if, in our opinion, at this stage, we are not in the presence of a proper set of rules, we still consider useful to imagine the impact created by some of the provisions currently comprised in the published version of the Code.

We would like to flag, in this sense, the rule within the Code according to which “communication made through media that does not belong to gambling organizers, regardless of the channel used, will be made by being placed – through the organizers’ diligence – in the areas, pages, real or virtual, during hourly intervals for which, in the case of that particular communication channel, assurances can be given that at least 90% of the audience is over 18 years of age or that the channel is intended exclusively for this age group.

Seen theoretically, this provision is grafted on the interpretation expressed by the National Audiovisual Council (“NAC”) within the framework of a general decision aimed at making certain TV ads compliant and issued in December 2017, within which the NAC argued that, starting with January 1, 2018, audiovisual commercial communications that referred to gambling could only by broadcasted between 23:00 pm and 07:00 am. However, the standard proposed by the NOG seems to lead to even more onerous restrictions than those put forward by the NAC, since implementing the rule from the current version of the Code could equate, in our opinion, to a total ban on gambling advertising on television. More specifically, according to the provisions of the National Audiovisual Code (a binding legal instrument), +18 channels cannot be broadcasted by audiovisual media services providers that are under Romanian jurisdiction, but only by foreign channels and in an encrypted manner; therefore, if we talk about “channels intended exclusively for this age group”, it could very easily be mistaken for the same restriction imposed by the National Audiovisual Code to +18 channels.

At the same time, with regard to the requirements of accuracy and clarity of those rules, we cannot fail to notice the rule in the Code which requires the provisions of guarantees on the minimum age of the audience, although, by definition, audience measurement and its categorizing is made by using statistics techniques, while conclusions are extracted on a sample basis, and not by an exhaustive analysis of an audience segment.

Another rule inserted in the Code, which is apparently contrary to commercial practices currently and largely used by many gambling organizers and which have not been censored by the NOG (up to now, at least), is the one that specifies that “communication must not be made through famous persons such as famous models, actors, athletes – by using their presence or image”. In our opinion, the impossibility of using, for instance, renowned athletes to promote a service that is so closely related to sports events could create an excessive barrier to commercial communication, since it is a standard marketing technique to use those people whose public image/reputation resonates in the perception of the recipients of the promoted product/service.

Therefore, although we cannot but welcome the NOG’s intention to create a set of responsible advertising rules meant to protect minors and other categories of vulnerable persons against the negative effects of gambling, it should be stressed that the notion of “responsible advertising” presupposes, first of all, the existence of advertising, and not its complete ban. Secondly, responsible conduct within the industry can only be attained by setting clear, predictable and transparent standards. In other words, one cannot be accused of irresponsibility, as long as one does not know clearly the limits of responsibility.

At this time, we can only hope that the openness manifested by the NOG in receiving the proposals of the industry to amend the Code will lead to the result desired by all those involved in this phenomenon, namely to create a viable, healthy industry that works in clearly defined parameters.

Place your bets!

SORIN CONSTANTINESCU: “You have to have fun at games!”

We offer you an amazing interview with Sorin Constantinescu, the man who needs no introduction within the national gambling. From current general issues of the gambling industry, to the evolution of the on-line market, from explaining the international success that PokerFest is currently enjoying and to their future plans, you’ll find out everything if you read this interesting material.

I’d like to ask you to go back in time to, let’s say 2 years ago; what are the changes that have occurred in the gambling industry during this time?

I can’t say that there have been significant changes, but I can say that there have been more negative changes. The anti-smoking law was introduced which affected us tremendously because earnings decreased both in live casinos and on the casino floors. With regards to live casinos, earning are 30% less than what they were before, we tried compensating by creating heated smoking areas outside, but the moment the client steps out of the game area, you’ve already lost him and he isn’t coming back. There haven’t been any other significant changes, we are only trying to make a strong lobby both in Parliament, the Government and at the ONJN (National Office for Gambling) as to remove the troublesome parts from the law, such as the part with the 5% of casino income, which is in the tax code and now is at the Budget finance commission in Parliament. Another issue is the entry tickets to poker clubs and casinos, which are just killing us. For example, the entry fee into a poker club is of RON 30 and people play RON 25 tournaments, that is the entry fee is greater than the tournament participation. Casinos face the same issue as there are no more high-roller clients who played large amounts of money and so they play RON 200 – 500 and they bring someone along, so they pay RON 100 on for the entry fee, which is absurd, this being one of the reasons for which earnings have decreased significantly.

Can we say that our country’s gambling industry is a mature, functional industry? In your opinion, what could be improved?

First of all, I believe that the part involving the communication and mentality of the authorities should be changed. We are still considered criminals, offenders, social pariahs. Our activity is yet to be seen, 28 years after the Revolution, as a normal economic activity where taxes are paid, even though the gambling industry is worth over 1 billion, even though it brings hundreds of millions to the tax budget each year, we are still treated as mobsters, the most rotten on the market. Speaking of which, in the last several months, the number of proposals to suspend and revoke licenses, on absolutely infantile grounds, has increased. When you suspend or revoke a license, the budget is the first to be affected, and if the facts aren’t all that grave, I believe this measure is unnecessary. A very current example is suspending the license of an operator with 59 games, and his activity was suspended because he had been late in announcing a promotion he had on a casino floor, the requirement of this announcement not even being provided by the law. I don’t think this is normal, it’s not normal that at each commission meeting held every 2 weeks there to be 10, 12, 14 suspension or removal of license files. For example, ANAF went for an investigation at a company where several irregularities had been found, which had been paid afterwards, situation in which the ANAF representatives did not request the suspension, and in goes the authorization commission proposing within the commission that the activity be canceled; I don’t understand this aversion toward economic agents. And the current Government policy is to give warning, in the case in which economic agents commit an error without having intended to do so, then that’s when you give them a warning, you tug on their arm, but you let them go on with their activity. I believe that the mentality of the directorate for authorizations and that of the ONJN has taken a turn for the worst in the past few months, already giving rise to a state of tension between the operators and the ONJN.

On-line gambling games have been legalized in the past few years. Do you believe that, at this time, the on-line gambling games have achieved their maximum development level, or is there still room for development?

As you very well know, between 2010-2015, operations were carried out on the “gray market” as no licenses were given, some of these operators have paid backdated as to benefit from the tax and criminal amnesty, these operators having already gotten their license, some paid but didn’t get their license and, also, there are still some who haven’t paid and they can no longer do so either because the amnesty lasted only 3 months and now they are once again waiting for the foreclosure period which lasts 5 years, so until 2020. It is possible that we will see an important increase in 2020 when these operators will join the market, as well.

Will the on-line gambling sites end-up substituting the game experience offered by the live casinos and the casino floors? Can they be a future danger for the traditional games?

I don’t believe they represent a danger as there are different typologies of clients, in live casinos we have players with the average age between 40-50 years old, while in the on-line environment, we have an age average between 20-30 years old. Furthermore, the on-line won’t be able to substitute the part involving touching the chips, communicating with the staff, the casino ambiance, a good table, so the conclusion is that I don’t believe that all of these could be substituted by the experience offered by a screen.

At a certain point in time, Bucharest alone had 14 live casinos, what was the reason for the majority of them closing down? Will we see an increase in the number of live casinos in our country, in the future? What can be done to revitalize this branch of our industry? Is there something to be done?

The main reasons where economic, we no longer have Romanian high-rollers, there are no more clients to play large amounts. A casino has monthly expenses of EUR 500,000 as in taxes, fees, salaries, rents etc. and it is difficult to produce EUR 15,000 – 20,000 per day only from regular Romania clients who come to play RON 400-500 lei, that is why all casinos are fighting to get foreign players. Here, we are confronted by the same communist mentality, the Romanian ambassadors in Arab countries, Turkey, the Emirates, refuse to give visas to those coming to casinos, even if they have deposited EUR 1 million in the casino’s account, they are regarded as offenders, criminals. The mentality is completely different in EU countries where they are happy is someone comes to spend money in their country. We have the same problem in all Arab country from which we are struggling to bring in players, you do realize that a player depositing EUR 1 million in the casino’s account isn’t coming to Romania to emigrate and get a job in constructions.

The main thing to be done is to change the mentality, which I highly doubt will happen, and the conclusion is that they should allow tourists to come to Romania and to spend money here.

Where do you see Romania from the point of view of gambling in the next 5-10 years?

I don’t see any significant changes, depends on who will run the ONJN, depends on whether there will be other legislative amendments. If things will remain quiet, I don’t believe there will be any significant changes during the following period of time.

If you were to start a new business, would you still go into gambling? What business and what amount of money would you be willing to risk?

I wouldn’t start another business in this field, I began in the ‘90s when I was 20 something years old, I had no idea that it isn’t very Christian to take money from people, and that is why I am full of deep-seeded remorse. I enjoyed doing my job in the most professional manner possible, as I would have done even if I would have worked in a steel foundry or even if I would have been a garbage man, I still wouldn’t have left one single cigarette bud on the ground. As I said, I performed by work as professionally as I possibly could, but I wouldn’t do it again even if I were to gain 10 times less.

I don’t think it’s about the risk anymore, we aren’t living the times we did after the Revolution, now, in order to make a serious business, you have to invest at least 1 million; at my level, I’m not thinking of making another doughnut shop. I’ve grown old, I no longer have the patience after so many years spent in the casino, 7 days out of 7, I would only get involved at a really high level. For example, something new, I am producing a folklore show at Sala Palatului, I like the management and event production part very much, I have a knack for all of it and I believe it is a business that fits me well, especially that it brings joy to people. Being friends with Cornelia and Lupu Rednic and having heard that they wanted to organize a show on their 25th career anniversary, I offered to take over production and I have been seriously involved for 2 months now, I hope it will turn out really well.

Around Romania, with the exception of Bulgaria, all markets are closed or very restrictive; what countries do you consider offer a good environment, both legislatively and economically for the development of gambling games?

Around Romania, there are countries which are not in the EU and given the problems they have, Russia, Moldova, the Ukraine, gambling is relatively closed. However, the EU countries have clear and pretty transparent legislations. There are good markets in other places on the globe, as well, for example, I am currently consulting with the government of Iraq with regards to their national lottery. Again, South America is a good market, we are trying to do something in Brazil, Mexico, we are trying on-line as well, so there is no imperative need to go into the Ukraine or Russia, where there is aggressiveness toward the business.

Almost 6 years ago, you launched PokerFest. How was this path? Did you achieve all your plans with regards to this chapter?

As I said, whenever I get involved, I like to do it in a serious manner; I didn’t create PokerFest with the purpose of winning money, I liked playing poker, I like the type of people who play poker, their education, their behavior. When I launched PokerFest, nobody thought we would get to the point of organizing tournaments at the level that we have, at least in the las year. In December of 2017, we had a tournament with 1200 participants from 35 countries held at the Marriott. I have organized tournaments with Unibet, Pokerstars, I didn’t believe even in my wildest dreams that we would organize a tournament at European level. It was a difficult road because it was very tough to convince Unibet or Pokerstars to make on-line satellites, to trust us, but we succeeded through courage and perseverance. I remember that, at our first tournament held in Timisoara, we had 50 players, now, we have 60-70 dealers. This says a lot…

Where does poker stand right now in our country?

Tournaments are organized; with regards to the poker clubs, we face the issue of entry tickets; if, for example, in a regional city, a second poker club emerges, then one of them will go bankrupt. We have 2 such poker clubs in Bucharest, struggling to hold on, but it is very difficult. The RON 30 fee is very high and people prefer to stay home or to go and play illegally in different locations, mini illegal poker clubs which can’t really be proven by the control bodies and so it is difficult for illegal organizers.

What are your plans for the future with regards to poker in particular, and gambling in general?

With regards to poker, I am trying to bring as many tournaments as possible into the country; I hope that from 2020 when the restriction is lifted, that other operators will come along as well, such as PartyPoker, which is strongly competing against Pokerstars. For example, I was recently in Prague for a tournament where the two operators had organized events at the same time and PartyPoker had taken a great number of clients from Stars. Other great brands will also probably enter the country, we are trying to bring them over and show them that we have a clear, fair legislation, that Romania is a stable country, without issues.

With regards to gambling, in particular, I can say that I am no longer physically involved, I no longer spend nights in the casino, I offer more consultancy for government such as Iraq, Mexico, Serbia and others. I am trying to share from my 28 years of experience in gambling to other companies or persons, I have helped many people who were addicted to gambling, as well. I gave them examples and I explained to them from my long lasting experience that you have to have fun at gambling and that you shouldn’t spend more than 10-20% of the monthly income. I explained to them that in my 28 years I haven’t seen one person to come out top (with profit), at the end of the year, after having calculated everything. We wouldn’t be driving expensive cars or going on luxury vacations if the players were winners at gambling games.

2018: A year to consolidate the industry from ROMBET’s perspective

The year 2018 is the year in which the primary and secondary legislation, by means of GEO 77/2009 and GR 111/2016, shall entirely show their effects given that they have set the foundation of a regulation that is modern and in complete compliance with European recommendations with regards to a common goal, which is a stable and well regulated industry.

 

It is the year in which the NOG (National Office for Gambling) shall regulate certain key fields which have yet to be sufficiently clarified, be it either responsible games, which shall become more evident in 2018, including through the Responsible Game Foundation, a clarification necessary for approving publicity activities, because there are still debates and different approaches among operators, especially between the specificity of promoting on-line operators and land-based operators.

 

2018 is the year in which the provisions of the “tax revolution” enter into force and in which ROMBET, by means of the seminaries it shall organize, both in Bucharest and at national level, must give answers to a series of questions which are constantly asked by gambling organizers:

 

  1. Establishing the type of tax which is to be paid, by respecting the statement obligations provided by law:
  1. The income tax of micro-enterprises, in the context in which, on 31.12.2017, they gained income which has not exceeded the RON equivalent of a million euros, at the exchange rate valid upon the closing of the fiscal year, with the question, if, perhaps, with the approval of GEO 79/2017, things shall return to their initial provisions, according to which the income from gambling cannot be taxed as such;
  2. The specific tax, for activities provided under Law 170 from 2016 in conditions in which it does not enter within the income tax of micro-enterprises, which has priority against the specific tax for all other gambling adjacent activities;
  1. Practical measures as to apply provisions regarding transferring compulsory social contributions due on behalf of employees with obligations attributed to employers. To this respect, the employer is to establish, retain, declare and pay the obligations due by employees, as well;

The level of contributions due and the income tax starting with the year 2018:

Employee: social security contribution due to the state social security budget – 25%; health insurance contributions due to the Sole national health insurance fund – 10%.

Employer: labor collateral contribution due to the state budget – 2.25%.

Tax rate: the tax rate is of 10% and it is applied to the taxable income associated to each source of each category used to determine tax.

Speaking about 2018, Mr. Dan Ghiță, ROMBET president, said that “it is important to give the signal we have to give: we have consolidated market, stable, transparent and regulated. Moreover, we are predisposed to change as the desire to grow is still extremely strong. We have a young generation of business people in the industry, and this is another very good sign, because they have made their reputation in an era of change, they know what it means and are prepared for it. Even more so, they will also generate it”.

 

Mr. Bogdan Coman, ROMBET Executive Director, believes that 2018 shall produce several more changes: more and more support companies arise for the gambling industry, which provide services especially for specialized software development. “If we turn our attention to neighboring countries – Bosnia, Serbia, Macedonia, Bulgaria – we see that this is becoming a more and more accentuated trend. IT companies in the industry, from the Balkans, are becoming more and more important all over Europe. This represents an extraordinary opportunity for Romania because of the fact that our country is known for its human resources in IT. We believe that this trend shall go on and shall become even more evident this year, not only based on accessing resources in the region, but also as a result of internal growth signaled by many of our association’s members”.

 

From an organizational point of view, ROMBET hopes that 2018 shall be the year in which associations in the field shall work best together and shall unite their efforts for more unity in strategies and actions. It all has already started in 2017: now, it’s time to enforce the partnership between associations.

Still in draft stage – this time AMLD

By de Cosmina Simion and Andrei Cosma– NESTOR NESTOR DICULESCU KINGSTON PETERSEN

We promised in the previous article that we were going to tell you more about the possible implications for the gambling industry determined by the implementation of the fourth EU Directive on money laundering (AMLD).

It seems however that we have been a little too optimistic and in the following paragraphs we will not have the opportunity to analyze the situation in concrete terms for a very obvious reason: AMLD has not been transposed into national legislation to the date of this article and the relevant normative act is still in draft stage.

From the beginning, we would like to state that in what follows we do not intend to detail the content of the obligations and provisions of the Draft law, but rather to signal a status quo. We cannot however ignore the fact that the new legislative framework regarding money laundering and terrorism financing will impose considerably higher standards to prevent this phenomenon.

With regard to the gambling sector, a first important modification is the expansion of the category of reporting entities. Thus, if under the current law (Law no. 656/2002), only casinos are explicitly included, the new legislation expands the scope to the common category, namely to the generic category of all “gambling services providers”. Furthermore, the Draft law expressly specifies that the norms apply both to traditional gambling operators as well as to online gambling operators.

At the same time, we cannot fail to notice the modifications regarding know-your-customer measures or those applicable to keeping documents. Under the future normative provisions, gambling operators will need to run the process of identification and knowledge of the players by reference to a multitude of criteria and risk factors, being also obliged to keep the documents and information obtained in this sense on paper and in digital format, in a form that is admitted in judicial proceedings. Without dissecting the interpretation that can arise regarding these obligations, we can anticipate even now that the impact felt by operators will be a significant one.

Beyond the date that the Draft law will see the light of the Official Gazzette (it should be reminded that the deadline for transposing the Directive in national legislation was 26th of June 2017), a few substantial issues remain unclear. More specifically, by corroborating the provisions of the gambling legislation with those in the Draft law, it cannot be established with certainty if the new national law in the AML field will be applicable to non-resident online gambling operators that operate in Romania and offer services to local players on the basis of the license and authorization granted by the National Gambling Office (NOG) or if these non-resident gambling operators will be subject to the AML legislation in the country of their establishment only. This problem is not simply a theoretical issue, on the contrary, by reading the list published by NOG on their official internet page, one can notice that the overwhelming majority of the licensed operators is made up of nonresident entities.

With the desire to clarify this inconsistency, we looked for the official point of view of the regulatory authority, namely the National Office for Preventing and Combating Money Laundering (NOPCML). The position expressed during conferences as well as their written answers were, however, unclear and somewhat confusing, since NOPCML specified that the solution should be given by the NOG, as the authority that granted licenses to nonresident operators. Certainly, NOG’s powers cannot extend to issues regarding AML legislation, whose observance and interpretation are the responsibility of another regulatory authority, an aspect that NOG also confirmed.

It seems, however that subsequently, NOPCML identified an answer to our question, through the voice of Ms Steluța Oncică, who, during the last edition of the Reunion of Gambling Professionals organized on the 7th of December 2017, specified clearly and concisely that nonresident online gambling operators who benefit from a license and authorization from the NOG are not subject to the reporting obligations that will be imposed by the new national legislation in the AML field, but that they will report the necessary information and transactions to the relevant authority from their state of residence.

We hope that the above represents NOPCML’s point of view and we will not end up in a situation where, at the moment of implementation, non-resident operators licensed in Romania will learn that they still have reporting obligations also towards the Romanian State or, even worse, are sanctioned for non-compliance.

The situation of these operators is still uncertain under the current Law no. 656/2002 (which implemented the third directive in the anti-money laundering field). In this case, it appears once again that NOPCML’ opinion has changed during time. Initially, non-resident operators licensed in Romania have been imposed with the reporting obligations established by Law no. 656/2002, but subsequently, the authority’s opinion has changed and they represented that the Romanian legislation in this field is not applicable for this category of operators.

The sequence of official and unofficial interpretations, expressed either in writing or publicly during conferences is difficult to follow even for us. From a regulatory perspective, there are no risks for these operators since they opted to over-report, even though (apparently) this was not necessary…or was it?

The implementation process seems to be far from being over, and the Draft law may still suffer amendments. Regarding certain estimates made by NOPCML representatives, the Draft law will enter into force in February 2018, but the secondary legislation is yet to be expected at the earliest at the end of next year.

Place your bets!

(Română) OPINIE ROMANIAN BOOKMAKERS – Patronatul Organizatorilor de Pariuri din România

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