Romania Proposes Draft Emergency Ordinance to Reform Gambling Industry
The Romanian government is taking significant steps to revamp the nation’s gambling industry with the issuance of a draft emergency ordinance. The proposed changes aim to address various aspects of the industry, including licensing, taxation, and consumer protection.
Broad Spectrum of Reforms
Romania’s gambling industry has experienced substantial growth in recent years, and the proposed reforms aim to bring a more structured and regulated approach to this thriving sector. Some key highlights of the draft emergency ordinance include:
Licensing Revisions: The proposed changes include modifications to licensing processes for gambling operators. These reforms seek to enhance the integrity and transparency of the licensing system, ensuring that licenses are granted to operators who meet stringent criteria.
Taxation Adjustments: The draft ordinance also addresses tax-related issues. It proposes a revised tax structure that takes into account the various forms of gambling, including online betting, casinos, and lotteries. The changes are intended to create a fairer and more sustainable tax regime for both operators and the government.
Responsible Gambling: Consumer protection is a paramount concern in the reform package. The draft ordinance introduces measures to strengthen responsible gambling initiatives. This includes mandatory self-exclusion programs and stricter advertising regulations to protect vulnerable individuals.
Market Entry Restrictions: The government is considering introducing tighter restrictions on entry into the Romanian gambling market. These measures aim to prevent unlicensed operators from offering gambling services in the country.
Enhanced Oversight: The draft emergency ordinance suggests the establishment of a more robust regulatory framework. This includes empowering regulatory bodies with greater authority to monitor and enforce compliance within the industry.
Online Gambling Regulations: With the increasing popularity of online gambling, the proposed changes include specific regulations for this sector. These regulations are designed to ensure that online operators adhere to the same standards as their land-based counterparts.
Government Aims for Balance
The Romanian government’s objective with this draft emergency ordinance is to strike a balance between maintaining a thriving gambling industry and safeguarding the interests of consumers. The reforms are seen as a necessary step to address some of the challenges and shortcomings that have emerged as the industry has grown.
These proposed changes have been developed through extensive consultation with industry stakeholders, consumer protection organizations, and regulatory bodies. The government believes that a collaborative approach is essential to creating an effective and sustainable framework for the future of the gambling industry in Romania.
Finalizing the Reforms
While the draft emergency ordinance represents a significant step toward reforming Romania’s gambling industry, it is important to note that it is still in the proposal stage. The government will conduct further consultations and discussions with stakeholders before finalizing the reforms.
Once the changes are approved and implemented, they are expected to bring about a more regulated and responsible gambling environment in Romania. The reforms aim to ensure that the industry continues to contribute positively to the country’s economy while prioritizing the welfare and protection of consumers.
As the government works toward refining and enacting these changes, the gambling industry, operators, and consumers in Romania will be closely watching the developments and the potential impact of these reforms on the sector.
Romania has unveiled a comprehensive draft Emergency Ordinance (GEO) aimed at transforming its gambling industry, representing one of the most significant overhauls since 2009. The proposed changes encompass various aspects of the sector, encompassing licensing, taxation, and measures to safeguard vulnerable gamblers.
Key Reforms in the Draft GEO
The draft ordinance, published on October 3, 2023, introduces a range of measures with the following objectives:
Stricter Licensing: The GEO proposes stricter criteria for companies eligible to organize and operate gambling in Romania. Only entities registered in Romania or those legally incorporated in EU/EEA or the Swiss Confederation with registered permanent establishments in Romania will be granted the right to engage in gambling activities.
Limiting Joint Operations: Joint gambling operations will only be permitted among licensed operators (Class I license holders) or legal entities under joint control with the same licensed operators.
Advertising Restrictions: Outdoor gambling advertisements exceeding 25 square meters will be prohibited.
Temporary Casino Operators: Legal entities that organize and operate gambling in tourist resorts for at least three months may attain the status of temporary casino operators.
Taxation Revisions: The draft ordinance introduces significant changes to the taxation structure. For instance, Class I license holders will see an increase in the annual fee, known as the “responsible gambling tax,” from EUR 5,000 to EUR 500,000. Class II license holders will also face an increase from EUR 1,000 to EUR 15,000.
Revenue Distribution: The GEO allocates 70% of licensed gambling operators’ contributions collected by the National Office for Gambling (NOG) to the state budget, with the remaining 30% dedicated to funding NOG activities.
Bonus for Advanced Payments: Operators who pay the monthly licensing fee for the entire year in advance will receive a 10% bonus.
Database for Self-Exclusion: A real-time database of self-excluded and ineligible persons will be established, managed, and continuously updated by the NOG. Gambling organizers will have access to this database.
Prohibitions for NOG Staff: NOG staff and members of the Supervisory Committee will be prohibited from participating in gambling operated by private legal entities in Romania.
Guarantee Fund via Insurance: To mitigate the risk of non-payment, gambling operators may establish a guarantee fund through a guarantee insurance policy issued by an insurance company within the EU/EEA or the Swiss Confederation.
Revised Fee Structures: Annual fees for various gambling activities, including remote gambling, will be amended. For example, Class I operators will face an annual gambling license fee of EUR 300,000, while Class II holders will pay EUR 20,000. These changes aim to create a more equitable fee structure.
Modified Special Taxes: The GEO revises special taxes, including documentation examination fees and license fees.
Balancing Industry Growth and Responsibility
The Romanian government’s proposed reforms seek to strike a balance between nurturing a thriving gambling industry and ensuring consumer protection. These changes are viewed as essential in addressing the challenges that have arisen due to the sector’s expansion.
The draft ordinance represents the culmination of extensive consultations with industry stakeholders, consumer protection organizations, and regulatory bodies. It is seen as a collaborative effort to create a robust and sustainable regulatory framework for Romania’s gambling industry.
While the reforms are still in the proposal stage, they reflect the government’s commitment to fostering a regulated and responsible gambling environment in Romania. As the government advances toward finalizing these changes, the industry, operators, and consumers will closely monitor the developments and their potential implications for the sector.
The revision of point (iii) in subparagraph B of paragraph (1) of Article 15 of GEO 77/2009 is as follows
Ensuring that the organizer’s central computer system incorporates a mechanism for registering and identifying participants in the game. Additionally, it must have a system for recording and transmitting in real-time to both a mirrored server and a backup server, both situated within the territory of Romania and made available to the National Office for Gambling (NOG) without any cost. This system should capture simultaneous gambling sessions, every participation fee submitted by each player, and all payouts issued to individual players.
The central computer system should guarantee the automatic, real-time recording of all transactions, receipts, payments involving players, as well as other financial transactions in the security server. Furthermore, it should periodically send consolidated reports to the mirrored server for NOG access, as per the procedural guidelines outlined in this Emergency Ordinance.” In addition, Article 15 undergoes further modifications by introducing two new points in paragraph 2), denoted as b^1) and b^2), as follows.
Conclusion
Romania’s draft Emergency Ordinance represents a significant shift in the country’s approach to the gambling industry. With a focus on safeguarding vulnerable gamblers and increasing tax revenues from gambling operators, the proposed changes will have far-reaching implications for the sector. From restrictions on outdoor advertising to increased annual fees and the establishment of a self-exclusion database, these measures aim to strike a balance between consumer protection and industry sustainability.
The requirement for gambling operators to register in Romania or have legal entities incorporated within the EU/EEA or Switzerland with registered permanent establishments in Romania signals a commitment to maintaining oversight and accountability within the country. This move may also encourage responsible gambling practices among operators, as they will have a vested interest in the Romanian market.
Additionally, the emphasis on transparency through real-time reporting mechanisms and the prohibition of NOG staff and supervisory committee members from participating in gambling activities further underscores the government’s commitment to ensuring fair and honest gaming.
Overall, Romania’s draft Emergency Ordinance reflects a broader trend in the global gambling industry, where regulators are seeking to modernize regulations, enhance consumer protection, and maximize revenue streams. As these changes are implemented, stakeholders in the Romanian gambling sector will need to adapt swiftly to comply with the new requirements and seize opportunities for growth in this evolving landscape.