Gaming Law 2022

Last Updated October 18, 2022

Romania

Law and Practice

Authors



SIMION & BACIU is a business law firm that brings a fresh perspective and strives for excellence while offering legal services with a high regulatory content. The team consists of over 20 lawyers and counsellors, working closely with five business support professionals, to provide a tailored relationship model to clients and business partners. The firm's operation is based on a consulting-litigation matrix structure in the following main areas of practice: intellectual property, gaming and gambling, technology and media, consumer protection and advertising, data privacy and personal data protection, corporate law, M&A, life sciences and disputes resolution. The team adds concrete value through its services, giving clients a substantial advantage – regardless of the complexity of a project, it is very likely that the lawyers and professionals at SIMION & BACIU will have already dealt with a similar situation, although the team is equally prepared to solve untapped problems as well.

The Romanian regulatory framework for gaming was reformed in 2015–16. This created a gambling market that can be fairly characterised as robust in both its land-based and online sectors. The COVID-19 crisis has however, in the past two years, had a severe impact on the land-based gambling industry, which has faced continuous restrictions.

The year 2022 can be characterised as a year of legislative inflation affecting the gambling industry from various (and, in some cases, unexpected) angles. Most notable in this respect are:

  • the AML Instructions – the sectoral norms for the application of anti-money laundering (AML) legislation to gambling operators were adopted in January 2022;
  • the primary gambling legislation was significantly changed/updated in July 2022; and
  • the taxes owed by entities in the gambling field have significantly increased and new payment obligations have been introduced.

In January 2022, the gambling regulator issued the sectoral norms/instructions clarifying how the AML regime must be implemented in the field of gambling.

In July 2022, the Romanian government adopted an ordinance amending the country's primary gambling legislation, the most notable changes being the increase in gambling fees, the introduction of new taxes and new obligations for gambling operators.

In August 2022, following an amendment made to the Fiscal Code, taxes owed by players from gambling revenues have been increased.

In November 2022, the Romanian parliament passed another bill aimed at further amending the primary gambling legislation. This introduces the obligation for gambling operators to keep electronic records of all persons accessing venues where gambling activities are organised and operated, and also to prove the existence of a technical infrastructure to compile databases of self-excluded and undesirable persons. At the time of writing (November 2022), this bill awaits promulgation by the Romanian president in order to be published in the official gazette and to come into force (it is quite likely this could occur by the end of 2022).

Also in November 2022, a new payment obligation was introduced by which “economic operators in the gambling field” must pay a 0.5% contribution to the National Cultural Fund, calculated at the level of the “revenues”. It is unclear at present how this new payment will be applied in practice.

Where the following sectors are marked as permitted, this means that the respective game or games of chance is/are permitted subject to obtaining the necessary licence and authorisation.

Betting

Betting activities are permitted under Romanian law, and the gambling legislation expressly regulates three types of online betting:

  • fixed-odds betting;
  • exchange betting; and
  • mutual (pari-mutuel) betting.

Bingo

Online bingo is permitted, and the online bingo licence also covers keno games.

Casinos

Online casinos are permitted, and the casino licence also covers online poker and online slot-machine gaming.

Lotteries

Online lottery games are restricted since this category falls under the monopoly of the Romanian National Lottery.

Fantasy Sports

Fantasy sports are not expressly regulated under Romanian gambling legislation. If this activity does not fulfil the mandatory conditions of gambling (see 3.2 Definition of Gambling), then fantasy sports should fall outside the purview of the gambling legal framework.

Social Gaming

Social gaming is not expressly regulated under Romanian gambling legislation. If this activity does not fulfil the mandatory conditions of gambling (see 3.2 Definition of Gambling), then social gaming should fall outside the purview of the gambling legal framework.

Poker

Online poker is permitted, and is included in the category of online casino games.

Other Relevant Sectors

Tombola/raffles

Tombola games are regulated under Romanian legislation as an express category of land-based gambling and the licensing regime was updated in 2022.

Any other types of games of chance; namely, new games of chance or combinations of games

This generic category includes any product that fulfils the cumulative conditions of games of chance and is not expressly defined by the gambling regulation. The legal regime for such unregulated products will be established by the local regulator based on the game rules and description presented by the organiser.

Where the following sectors are marked as permitted, this means that the respective categories of games of chance are permitted, subject to obtaining the necessary licence and authorisation(s).

Betting

Betting activities are permitted under Romanian law, and the gambling legislation expressly regulates three types of land-based betting:

  • fixed-odds betting;
  • exchange betting; and
  • mutual (pari-mutuel) betting.

Poker

Poker is permitted under Romanian law, and the gambling legislation expressly regulates land-based poker clubs.

Bingo

Bingo is permitted, with Romanian legislation regulating two types of land-based bingo games: bingo performed in specialised bingo halls and bingo organised via television networks.

Casinos

Casinos are permitted in Romania, with the gambling legislation regulating in detail the regime for land-based casino licensing.

Gaming Machines

Gaming machines are permitted in Romania. The legislation regulates three categories of slot-machine gaming:

  • slot machines with unlimited stakes and winnings;
  • electronic devices awarding winnings with limited risk (amusement with prize (AWP) machines); and
  • video-lottery machines (VLT).

Lotteries

Land-based lottery games are restricted since this category falls under the monopoly of the Romanian National Lottery.

Other Relevant Sectors

Tombola/raffles

Tombola games are regulated under Romanian legislation as an express category of land-based gambling and the licensing regime was updated in 2022.

Temporary games

Land-based casino games, slot-machine games with unlimited stakes and winnings, and land-based bingo that takes place in tourist resorts or on leisure craft qualify as temporary games of chance and are subject to a special temporary licence and authorisation, valid for a period of three months.

Poker festivals are a distinct category of temporary games defined by law as temporary events organised in tourist resorts or other locations, and consisting of poker tournaments performed exclusively between the participants.

Any other types of games of chance; namely, new games of chance or combinations of games

This generic category includes any product that fulfils the cumulative conditions of games of chance and is not expressly defined by the gambling regulation. The legal regime for such unregulated products will be established by the local regulator based on the game rules and description presented by the organiser.

The conditions under which the organisation and operation of games of chance are permitted in Romania are outlined in the following normative acts:

  • Government Emergency Ordinance No 77/2009 on the organisation and operation of games of chance (GEO 77/2009);
  • Government Decision No 111/2016 for the approval of the methodological norms for the implementation of Government Emergency Ordinance No 77/2009 on the organisation and operation of games of chance (GD 111/2016);
  • Government Emergency Ordinance No 20/2013 on the establishment, organisation and functioning of the National Gambling Office (Oficiul Național pentru Jocuri de Noroc, or ONJN); and
  • Government Decision No 298/2013 on the organisation and functioning of the ONJN.

Gambling activities are also regulated by means of instructions, orders or decisions issued by the ONJN in relation to various aspects of gambling activity, such as:

  • the certification of online gambling platforms;
  • interconnection protocols and reporting requirements for slot machines; and
  • reporting of the revenues obtained by both land-based and online operators.

Moreover, certain requirements in the AML field are also applicable to gambling activities, and were initially contained in Law 129/2019, which implements the Fourth and Fifth AML Directives. At the end of 2021, the gambling regulator issued the sectoral norms/instructions clarifying how the AML regime must be implemented specifically in the field of gambling. These came into force in January 2022.

Gambling is defined by GEO 77/2009 as an activity that has the following cumulative characteristics:

  • a participation fee;
  • the random selection of results on which the game is based;
  • monetary winnings; and
  • a public offering.

Land-based gambling activities are defined as all games of chance – irrespective of whether or not they are expressly regulated by GEO 77/2009 – that:

  • fulfil the legal conditions applicable to a game of chance;
  • are performed through gaming means installed in Romania; and
  • are not transmitted or performed through any kind of communication system (internet, landline or mobile telephone, or any other transmission system).

Online gambling activities are defined as all games of chance – irrespective of whether or not they are expressly regulated by GEO 77/2009 – that:

  • fulfil the legal conditions applicable to a game of chance; and
  • are performed through communication systems of any kind (internet, landline or mobile telephone, or any other transmission system).

In principle, failure to observe the legal requirements in the field of gambling may lead to civil, administrative or criminal sanctions.

Administrative Liability

By way of example, administrative liability may be triggered when:

  • the organiser of land-based gambling activities allows individuals to participate in games of chance without having valid identity documents in their possession;
  • the gambling organiser, without a distinction being made between land-based and online activities, does not pay the participants the winnings obtained from their gambling within three business days, provided that the conditions imposed on the participant in relation to the proof of winnings are fulfilled; or
  • the gambling organiser, without a distinction being made between land-based and online activities, fails to notify the ONJN, within a certain deadline, about any modifications that have occurred to the data on the basis of which the licence and authorisation were granted.

Failure by a gambling organiser to comply with the legal requirements can also lead to the suspension or revocation of its licence by the ONJN.

Criminal Liability

Operating games of chance without the required licence and authorisation constitutes a criminal offence. Criminal liability may also be triggered when the following gaming products are offered to players:

  • fraudulent games of chance;
  • games of chance through radio channels or through other assimilated transmission means;
  • games of chance based on the results of clandestine competitions, such as dog fighting, which is expressly forbidden by Romanian legislation, or illegal car racing;
  • clandestine games of chance, where the results of the game are influenced by the skill of the person operating the game for the purpose of obtaining revenues, rather than being random; and
  • competition games with winnings of any type – offered through telephone lines or other communication systems, television or radio – where the granting of prizes is based solely on the accuracy of the answers provided to general questions, which involve a participation fee.

Liability for Participants

With respect to the participants in games of chance, according to GEO 77/2009, any individual in Romania who participates in online gambling operated by an unlicensed or unauthorised operator will face administrative fines ranging from RON5,000 to RON10,000, thus triggering the administrative (but not criminal) liability of the player.

Operating games of chance without having been granted the required licence and authorisation constitutes a criminal offence and shall be punished with a term of imprisonment from one month to one year, or with a fine. Additional sanctions applicable for the criminal offence of unlicensed gambling are that the gambling operator will be dissolved, and the amounts derived from the unlawful activity will be confiscated.

In July 2022, the Romanian government passed an ordinance that significantly increased the taxes applicable to the gambling industry and it also amended the primary gambling legislation. Among the changes that have been enacted, the following are noteworthy.

  • Advertising contracts for the promotion of gambling brands, platforms, applications or activities through the placement of advertising messages in localities and on public roads, or using a television service, as well as any act modifying the initial value, must be communicated by the operators to the gambling regulator within five working days from the date of signing. Contracts concluded with sports entities or federations which entail advertising in stadiums or sports halls do not fall under this requirement.
  • Operators owe a 5% tax (this is a new tax, introduced as of July 2022) on the value of the above advertising contracts, payable by the 25th day of the month following the one during which the contract is concluded. In the case of contracts that entail recurring payments/instalments, the payment obligation of the new tax is due on the last day of the month when the instalment is due. The tax authority has issued an order regulating how this new tax needs to be reported. It is however unclear, even at this stage, who should pay this tax (eg, operator, advertising agency, etc).
  • The definition of remote casino games has been modified to clarify that the games also cover online slot-machine gaming and may be performed via one or several platforms (the new provision corrects an error of the legislator in 2015 when online slots were mistakenly left out of the definition of casino games – in practice they were, however, included in this category).
  • The new ordinance completes and further details the regime for raffles/tombola games (in the past, the regulator pointed out that the legislation needed to be updated in order to be able to issue licences for this type of game).
  • The deadline for the annual responsible gambling contribution has changed – following this government ordinance, the deadline is 25 January of each year for existing licensees. For operators obtaining a new licence, the responsible gambling contribution for the first year is due within ten days of the approval of the application.
  • The regime for notifying changes to the initial licensing data has changed. The new ordinance states that this obligation applies to both B2C operators and B2B providers that hold a Class 2 licence in Romania. Further on, the ordinance sets forth that operators/providers must notify “significant changes” to their initial licensing data. The regulator should have issued an order clarifying what is meant by “significant changes” within 30 days of the government ordinance coming into force (ie, by mid-August 2022), but this piece of legislation had still not been enacted at the time of writing.
  • The regime/concept of “blacklist” has been expanded to websites, platforms, brands, trade marks, logos and gambling applications of unauthorised operators (prior to this ordinance, only websites were included on the blacklist). The same regime now applies to websites, platforms, brands, trade marks, logos and gambling applications that promote unlicensed gambling.
  • The government ordinance further clarifies that the sanctions of cancellation and revocation of a licence also apply to B2B providers (prior to this change, the texts referred expressly only to B2C operators). In the case of cancellation, the new ordinance stipulates that the amounts of money obtained will be seized.
  • The ordinance introduces an exception from the general regime of minor offences in the sense that the sanction of warning as well as the benefit of settling a fine by paying half of the amount (if the payment is made within a certain timeframe) is not applicable to offences under the gambling legislation.

At the time of writing (November 2022), several pieces of legislation that are relevant for the gambling industry are pending enactment. These include:

  • a legislative proposal to modify/update the primary gambling legislation; and
  • two legislative proposals to restrict advertising for games of chance.

The public authority competent to supervise the Romanian gambling market is the National Gambling Office (ONJN), a specialised body of the central public administration subordinated to the Romanian Ministry of Finance, which has enforcement prerogatives and is also competent to grant licences and authorisations.

The new legal framework for gambling activities was created in 2015–16, when several pieces of legislation regulating the performance of gambling in Romania were enacted. The ONJN has issued licences and authorisations by applying the new legislation rather literally, so one may argue that the authority’s approach in terms of regulation is quite prescriptive.

Changes under the New Government Ordinance

Taxes owed by licensed operators and providers

The government ordinance which amended the primary gambling legislation in July 2022 also considerably increased the taxes owed by licensed B2C operators and B2B providers, and introduced additional new taxes. The most notable changes include the following.

  • The authorisation tax for online gambling has increased from 16% of the gross gaming revenue (GGR) to 23%. It must be noted that the legislation provided for a minimum annual authorisation tax of EUR100,000 which has been increased to EUR120,000.
  • By comparison to the online sector, the authorisation tax for land-based fixed-odds betting increased from 16% to 18% of the GGR.
  • The annual licence tax for online gambling, before the legislative changes, ranged from EUR6,000/year (if the annual turnover was less than EUR500,000) to EUR120,000/year (if the annual turnover exceeded EUR10 million). After the changes, the licence tax now ranges from EUR15,600/year to EUR312,000/year. In practice, the gambling regulator has construed “turnover” as the total amount of bets, so it is very likely that an operator will have total bets exceeding EUR10 million and hence be obliged to pay the maximum licence tax of EUR312,000/year.
  • The annual licence fee for Class 2 licensed B2B providers has increased from EUR6,000/year to EUR9,500/year. In addition, the regulator also requires B2B licensees to pay an administrative tax for the issuance of the licence in the amount of EUR9,500 (not as an annual payment, but only at licensing stage).
  • The annual authorisation tax for land-based slot-machine gambling increased from EUR3,600/machine to EUR4,600/machine. It is important to emphasise that slot machines are the most popular form of land-based gambling in Romania (estimates suggest that more than 60,000 machines are operated in the market) and that an operator must have at least 75 authorised slot machines in order to maintain the validity of its licence.
  • A new administrative tax of EUR150 has been introduced for the analysis of documentation related to the integration or recertification of new online games. While the amount of this new tax is not significant in value, it must be noted that, under the law, any new online game intended to be offered in Romania must receive prior approval from the regulator. This administrative tax is not, however, owed per individual game, but for each individual approval request submitted by an operator (and a single request can technically include hundreds of games).

Players’ tax on gambling income

Besides the increase in taxes owed by gambling operators and suppliers, the taxes owed by players for revenues obtained from gambling have also increased. The Fiscal Code has therefore been amended by a government ordinance and, starting 1 August 2022, the taxes on gambling income obtained by players from most of the categories of games of chance have increased as follows:

  • for revenues up to RON10,000 (approximately EUR2,000), the tax has increased from 1% to 3%;
  • for revenues ranging from RON10,000 to RON66,750 (approximately EUR13,000), the tax has increased from 16% to 20% (calculated on the amount exceeding RON10,000); and
  • for revenues exceeding RON66,750, the tax has increased from 25% to 40% (as per the current regime, in this case, a player must pay tax of RON11,650 plus 40% on the amount that exceeds RON66,750).

Withholding tax

It is worth pointing out that in the case of online gambling, the Fiscal Code has already imposed a withholding tax mechanism applicable whenever the player makes a withdrawal from their game account to their bank account (or other withdrawal method). Hence, at each withdrawal from the online platform, operators must apply the above taxation thresholds.

Tax exemption

It is also worth noting that for certain categories of land-based gambling (ie, casinos, slot-machine halls, scratch cards organised by the National Lottery and poker clubs) players still benefit from a tax exemption that is applicable to revenues that do not exceed RON66,750 (approximately EUR13,000).

National Cultural Fund tax

Besides the tax increases summarised above, the gambling industry took another hit in November 2022. Via a law that amended the legislation in the field of cultural activities, the Romanian parliament also introduced a new payment obligation in the form of a contribution to the National Cultural Fund. This contribution amounts to 0.5% of the revenues obtained by “economic operators in the field of gambling”.

At the time of writing (November 2022), it is still unclear who are the “economic operators in the field of gambling” and what “revenues” means in the context of this new payment obligation.

Romanian legislation regulates the following types of licences.

  • Class 1 licence and related authorisation(s) – these are the permits that must be obtained by a B2C operator in order to offer gambling services on the Romanian market (irrespective of whether this relates to land-based or online gambling).
  • Class 2 licence – this licence is required for B2B providers, specialising in the gambling industry, that supply products/services to B2C operators licensed in Romania. The categories of B2B suppliers to which the ONJN has issued Class 2 licences are as follows:
    1. manufacturers, distributors and other entities performing activities with gaming qualities or gaming components (note that this type of Class 2 licence is relevant for the land-based sector);
    2. software providers;
    3. providers of platform management and hosting services;
    4. providers of live casino streaming services;
    5. certification laboratories, auditors and conformity assessment bodies;
    6. payment processors; and
    7. marketing affiliates.
  • Class 3 licence – this licence is granted by benefit of law to the Romanian National Lottery, which has a legal monopoly over the organisation of land-based and online lottery games.

Class 1 and Class 2 licences are readily available, provided that the respective B2C or B2B operators meet the applicable licensing requirements. The Class 3 licence is granted only to the Romanian National Lottery.

The Class 1 licence is valid for ten years and may be renewed for identical periods of time, while the authorisation is generally granted for one year and must be renewed/prolonged on an annual basis (with the exception of the authorisation for land-based temporary games, which is valid for three months and can be renewed).

The Class 2 licence is also valid for ten years, subject to the payment of the annual licence fee within the applicable deadline.

As a core rule, only operators based in the EU, EEA or Swiss Confederation may apply for a B2C licence and authorisation.

Licensing Process for Land-Based Gambling

In order to perform land-based gambling activities, a gambling operator must obtain a Class 1 licence and one or several authorisations. While the licensing procedure is not product-specific, the authorisation must be obtained for each type of gambling activity intended to be performed.

Obtaining a licence

In order to obtain the licence, the operator must submit an application request along with several corporate and operational documents related to the legal entity itself, as well as its directors and shareholders. Such documentation includes criminal record checks for each director and shareholder, and affidavits given by the director(s) disclosing, among other aspects, the ultimate beneficial owner of the company (a 25% shareholding being the relevant threshold for an ultimate beneficial owner).

Obtaining authorisation

The authorisation can be obtained by an operator that has previously been granted a Class 1 licence. The regulation allows an operator to submit licence and authorisation applications at the same time, provided that the necessary conditions are fulfilled for each of these. The conditions for obtaining the authorisation vary in accordance with the type of gambling activity sought to be performed, and refer to operational aspects (eg, the game rules for each game offered to the players and the configuration of the gambling premises) and technical requirements (eg, the certification of the gambling equipment or the development of the reporting solution to the ONJN of the aggregated financial and operational data).

Licensing Process for Online Gambling

To a certain extent, the licensing and authorisation requirements for land-based gambling also apply to online activities; the observations mentioned above regarding the documentation for directors and shareholders are also applicable in connection with an online licence.

However, while authorisation must be obtained for each type of activity (or machine, as the case may be) in land-based gambling, in the case of online gambling, only one authorisation needs to be obtained for all the activities conducted on the same gambling platform (which can be connected to one or several internet domain names).

Technical and operational requirements

Other particular conditions applicable to an operator applying for a licence and authorisation to perform online gambling relate mainly to technical and operational requirements.

Thus, the applicant is required to have its entire IT system audited by a specialised testing laboratory that holds a Class 2 licence, while the gambling software must be certified by a Class 2 licensed certifier, as must the random number generator and return-to-player percentage for each game. In terms of the necessary infrastructure, if the main gaming server is not located in Romania, the operator must establish safe and mirror servers in Romania in order for the ONJN to be able to monitor the activity related to the Romanian market and verify any incidents that occur. In brief, while the safe server stores a rough replica of the data from the gaming server, the mirror server must contain centralised reports summarising the daily activity and financial results obtained by the operator.

On the operational side, among other requirements, operators that are not Romanian-based companies are required to appoint an authorised representative (a Romanian legal or natural person) to act as the representative of the operator before the Romanian state authorities.

In accordance with the regulation, the complete licensing documentation must be submitted to the regulator at least nine business days before the ONJN Supervisory Committee’s meeting. The Supervisory Committee is the body within the ONJN that approves licence applications during its periodic meetings, which are generally organised twice a month.

Pursuant to GEO 77/2009, licence applications will be resolved within 30 days from the date of submission of the complete documentation. However, considering that the ONJN has the competence to request any additional documents or information deemed necessary, in practice the licensing and authorisation procedure generally exceeds the initial 30-day timeframe provided by the law.

The regulation does not impose any fees in relation to an application for a land-based licence and/or authorisation.

However, for an online licence, the applicant is required to pay an administrative fee of EUR3,000 for the review of the licensing documentation. Online operators are also required to pay a EUR9,500 fee for the issuance of the licence.       

Furthermore, the application for a Class 2 licence is subject to payment of an administrative fee for the issuance of the licence of EUR9,500 per licence.

Annual Fees for Land-Based Gambling

In the case of land-based gambling, licensed operators are required to pay an annual licence tax in the form of a flat fee of a specific amount, depending on the type of land-based games operated. The licence tax may range from EUR15,000 per year for tombola or poker clubs, to EU115,000 per year for land-based casinos.

Land-based operators must also pay an annual authorisation tax, which is calculated by reference to the following criteria.

  • Operator’s revenue – in the case of betting activities the authorisation tax represents 18% to 21% of the operator’s revenue (18% for fixed-odds betting and 21% for mutual betting and counterpart betting), while for bingo broadcast on television and tombola/raffles, the authorisation tax represents 23% of the operator’s revenue, but for all types of game this tax can be no less than a specific amount depending on the type of game (EUR100,000 for betting and EUR130,000 for bingo on television).
  • Number of locations/gaming means – land-based casinos incur an authorisation tax of EUR65,000 per table (in Bucharest) or EUR35,000 per table (outside Bucharest), and each slot machine with unlimited winnings requires an authorisation tax of EUR4,600. For bingo performed in gaming halls, the operator is bound to pay an authorisation tax of EUR7,000 per location plus 5% of the value of the printed cards mandatorily purchased from the Romanian National Printing House.

The legislation also imposes certain special taxes for the following categories of land-based gambling:

  • an entry fee for casinos (RON50) and poker clubs (RON30); and
  • a vice tax for unlimited-winnings slot machines and video-lottery machines of EUR500 per post (terminal) per year.

As a separate payment obligation, organisers of land-based games of chance are required to pay a responsible gambling contribution of EUR1,000 per year.

Annual Fees for Online Gambling

An operator of online gambling must pay an annual licence tax calculated by reference to the operator’s turnover, ranging from EUR15,600 per year (for an annual turnover of less than EUR500,000) to EUR312,000 per year (for a turnover exceeding EUR10 million).

The authorisation tax for online gambling is also paid on an annual basis and amounts to 23% of the income obtained from gambling activities (GGR), but cannot be less than EUR120,000 per year.

Online licensed operators are also required to pay an annual responsible gambling contribution of EUR5,000.

For the analysis of the documentation related to the integration or recertification of new online games, gambling operators must pay a new administrative tax of EUR150 per approval request (regardless of the number of games submitted for approval through the request) submitted to the gambling regulator.

Taxes for Licensed B2B Providers

B2B providers holding a Class 2 licence are obliged to pay an annual licence tax of EUR9,500 per licence and also a responsible gambling contribution of EUR1,000. The law simply stipulates that the contribution is EUR1,000, but in practice, the regulator imposes this contribution for each Class 2 licence held by the B2B supplier.

Pursuant to GEO 77/2009 and GD 111/2016, land-based gambling activities may be operated only in specialised locations, as outlined below.

Casinos

Casinos are the specialised locations used for the operation of games of chance characteristic to casinos. The surface area and structure of casinos must enable the installation of gaming equipment and other technical devices needed to carry out the specific activity, and they must be located in buildings intended for use as business premises or in hotels with a minimum three-star rating. Casinos are subject to minimal legal requirements with regard to the location of the premises, surface and safety equipment.

Betting Agencies

Betting agencies are the specialised locations for betting activities in which at least one dependent (fixed-odds) betting terminal is operated and that cumulatively meet several conditions in terms of minimum surface area, mandatory equipment, etc.

Locations for Operation of Slot Machines

All premises used for the operation of slot-machine gaming, irrespective of the type of slot machine, are subject to certain restrictions in relation to the advertising of the premises, as follows:

  • organisers must prevent viewing of the activities carried out within the respective premises; and
  • organisers may not suggest gambling activities by using images, text or other symbols.

Locations for Operation of Bingo Games

Pursuant to GD 111/2016, bingo games performed in specialised gaming halls may only take place in locations within specialised premises or business premises that are registered as the organiser’s main or secondary office and that meet a set of mandatory conditions in relation to logistics and organisation: sufficient electric lighting, air-conditioning, a sound system, safety-related requirements, a back-up electrical circuit, etc.

In January 2022, the gambling regulator issued the sectoral norms/instructions clarifying how the AML regime must be implemented in the field of gambling.

In July 2022, the new government ordinance amending the primary gambling legislation was adopted by the Romanian government, the following changes being the most notable.

  • Advertising contracts for the promotion of gambling brands, platforms, applications or activities through the placement of advertising messages in localities and on public roads, or using a television service, as well as any act modifying the initial value, must be communicated by the operators to the gambling regulator within five working days from the date of signing. Contracts concluded with sports entities or federations which entail advertising in stadiums or sports halls do not fall under this requirement.
  • Operators owe a 5% tax on the value of the above advertising contracts, payable by the 25th day of the month following the one during which the contract is concluded. In the case of contracts that entail recurring payments/instalments, the payment obligation of the new tax is due on the last day of the month when the instalment is due. The tax authority has issued an order regulating how this new tax needs to be reported. It is however unclear, even at this stage, who should pay this tax (eg, operator, advertising agency, etc).
  • The new ordinance completes and further details the regime for raffles/tombola games (in the past, the regulator pointed out that the legislation needed to be updated in order to be able to issue licences for this type of game).
  • The deadline for the annual responsible gambling contribution has changed to 25 January of each year for existing licensees. For operators obtaining a new licence, the responsible gambling contribution for the first year is due within ten days of the approval of the application.
  • The new ordinance stipulates that B2C operators and B2B providers that hold a Class 2 licence are obliged to notify the gambling regulator of any significant changes to the information/documents initially submitted when applying for the licence. According to the law, the meaning of the term “significant changes” should have been established through an order issued by the regulator within 30 days of amending the primary legislation in July 2022. However, at the time of writing, the order had not been released.
  • The regime/concept of “blacklist” has been expanded to websites, platforms, brands, trade marks, logos and gambling applications of unauthorised operators (prior to this ordinance, only websites were included on the blacklist). The same regime now applies for websites, platforms, brands, trade marks, logos and gambling applications that promote unlicensed gambling.
  • The government ordinance further clarified that the sanctions of cancellation and revocation of a licence also apply to B2B providers (prior to this, the text referred expressly only to B2C operators). In the case of cancellation, the new ordinance stipulates that the amounts of money obtained will be seized.
  • The ordinance introduces an exception from the general regime of minor offences in the sense that the sanction of warning as well as the benefit of settling a fine by paying half of the amount (within a certain timeframe) is not applicable to offences under the gambling legislation.

In November 2022, the Romanian parliament passed another bill aimed at further amending the primary gambling legislation. Currently, this bill awaits promulgation by the Romanian president in order to be published in the official gazette and come into force (it is quite likely it will come into force by the end of 2022). Once in force, the new law will introduce the following new obligations:

  • in order to obtain authorisation to operate (authorisation being, besides the licence, the other necessary permit for offering gambling in Romania), operators must prove the existence of a technical infrastructure to compile databases of self-excluded and undesirable persons; and
  • all gambling operators must keep electronic records of all persons accessing venues where gambling activities are organised and operated, as well as archive the electronic databases of self-excluded and undesirable persons, and keep them for a minimum of five years after their creation.

An online B2C licence allows an operator to offer the products/activities covered by the respective licence on a Romanian platform. The Romanian platform covers all players with Romanian IP addresses as well as all Romanian citizens who do not have a fiscal residence in a foreign jurisdiction.

A B2B licence allows a licensed supplier to perform the activities covered by the respective licence in Romania. As a particularity of Romanian legislation, B2B licences are not granted for specific products (such as a specific set of games or gambling platforms) but refer to generic B2B activities (eg, “production and distribution of gambling software” or “provision of hosting facilities”).

As mentioned in 4.4 Types of Licences, affiliates wishing to operate in the Romanian market are required to obtain a specific Class 2 licence from the ONJN. The regulation defines an affiliate as any natural or legal person who obtains revenues on the basis of a contract concluded with a B2C online operator as a result of participation in gambling by players redirected by the affiliate onto the website/platform of the B2C operator.

Besides the general obligation to pay the annual licence fee and responsible gambling contribution, licensed affiliates also have an express legal obligation to send all affiliation contracts concluded with B2C operators to the ONJN.

Romanian gambling legislation does not specifically regulate the possibility of using white-label providers.

The regulation sets forth that licences are nominal and only permit operation by the holder of the licence. As an exception to this general rule, GD 111/2016 provides the possibility to create joint ventures, in which it is sufficient for only one of the entities involved to hold the gambling licence. However, joint operation entails joint liability for all parties involved.

In January 2022, the gambling regulator issued the sectoral norms/instructions clarifying how the AML regime must be implemented in the field of gambling.

In July 2022, the new government ordinance amending the primary gambling legislation was adopted by the Romanian government, bringing about a number of significant changes to the online gambling sector. See 3.7 Recent or Forthcoming Legislative Changes.

In November 2022, the Romanian parliament passed another bill aimed at further amending the primary gambling legislation. Currently, this bill awaits promulgation by the Romanian president in order to be published in the official gazette and come into force (it is quite likely it will come into force by the end of 2022). Once in force, the new law will introduce the following new obligations:

  • in order to obtain authorisation to operate (authorisation being, besides a licence, the other necessary permit for offering gambling in Romania), operators must prove the existence of a technical infrastructure to compile databases of self-excluded and undesirable persons; and
  • all gambling operators must keep electronic records of all persons accessing venues where gambling activities are organised and operated, as well as archive the electronic databases of self-excluded and undesirable persons, and keep them for a minimum of five years after their creation.

The primary tool to prevent unlicensed gambling activities is the “blacklist” of unlicensed gambling websites, which is managed by the ONJN and currently comprises more than 1,300 internet domain names. The legislation sets forth that internet service providers (ISPs) and all service suppliers for the gambling industry, including payment processors, are bound to comply with the decisions taken by the regulator in relation to unlicensed websites. Specific reference is made to ISPs, which are required to ban access to the blacklisted websites (as well as to those websites promoting unlicensed gambling) under the threat of a fine ranging from RON50,000 to RON100,000.

The gambling regulatory framework is focused on protecting minors and preventing their access to gambling, as well as ensuring the integrity and transparency of gambling activities and maintaining a fair game system that is constantly supervised.

All entities that are involved in the gambling industry and hold a licence granted by the Romanian regulator (both land-based and online operators, as well as licensed B2B providers) are required, pursuant to GEO 77/2009, to pay an annual responsible gambling contribution to a public body, the main purpose of which is to finance programmes and activities aimed at ensuring a responsible gambling environment and preventing gambling addiction.

In November 2022, the Romanian parliament passed another bill aimed at further amending the primary gambling legislation. Currently, this bill awaits promulgation by the Romanian president in order to be published in the official gazette and come into force (it is quite likely that it will come into force by the end of 2022). Once in force, the new law will introduce the following new obligations:

  • in order to obtain authorisation to operate (the authorisation being, besides the licence, the other necessary permit for offering gambling in Romania), operators must prove the existence of a technical infrastructure to compile databases of self-excluded and undesirable persons; and
  • all gambling operators must keep electronic records of all persons accessing venues where gambling activities are organised and operated, as well as archive the electronic databases of self-excluded and undesirable persons, and keep them for a minimum of five years after their creation.

Regarding online gambling, the legislation specifically provides that the platforms must be designed to enable responsible gambling functions, such as:

  • the setting of daily, weekly or monthly deposit limits; or
  • the possibility of players permanently or temporarily self-excluding from gambling.

Furthermore, the platform must also have a “reality-check” feature embedded in it, in the form of a warning message posted automatically every 60 minutes, which must inform the player about the amount of time spent gambling.

Online operators are also obliged to inform a player who has opted to self-exclude about the possibility of receiving counselling and treatment for gambling addiction in a treatment centre.

In November 2022, the Romanian parliament passed another bill aimed at further amending the primary gambling legislation. Currently, this bill awaits promulgation by the Romanian president in order to be published in the official gazette and come into force (it is quite likely that this will occur by the end of 2022). Once in force, the new law will introduce the following new obligations:

  • in order to obtain authorisation to operate (authorisation being, besides the licence, the other necessary permit for offering gambling in Romania), operators must prove the existence of a technical infrastructure to compile databases of self-excluded and undesirable persons; and
  • all gambling operators must keep electronic records of all persons accessing venues where gambling activities are organised and operated, as well as archive the electronic databases of self-excluded and undesirable persons, and keep them for a minimum of five years after their creation.

Romania has implemented the Fourth and Fifth AML Directives, through Law 129/2019. At the end of 2021, after considerable delay, the gambling regulator issued the sectoral norms/instructions clarifying how the AML regime must be implemented in the field of gambling, and these came into force in January 2022.

The AML instructions brought clarifications regarding the subjects of the AML regime, which applies to all operators licensed in Romania, irrespective of their country of incorporation.

Furthermore, the AML instructions provide particular obligations for licensed operators in the field of gambling, as well as extensive requirements to conduct risk management, to perform standard or enhanced KYC in certain scenarios, to implement data retention obligations, to report mechanisms to the AML authority, or to appoint and train personnel qualified in the area of AML (Money Laundering Reporting Officers, or MLROs).

Excessive Obligations

However, while clarifying certain aspects that are characteristic to the gambling sector, the AML instructions have introduced certain excessive or unclear obligations, such as an operator’s obligation to perform a due diligence process (including the identification of the ultimate beneficial owner), not only for customers/players, but also for each and every business supplier. This requirement may be considered excessive since the AML law itself does not specifically impose this obligation.

In January 2022, the Romanian regulator issued instructions for the application of AML legislation in the gambling field.

The AML instructions brought clarifications regarding the subjects of the AML regime, which applies to all operators licensed in Romania, irrespective of their country of incorporation.

Furthermore, the AML instructions provide particular obligations for licensed operators in the field of gambling, as well as extensive requirements to conduct risk management, perform standard or enhanced KYC in certain scenarios, implement data retention obligations, set up reporting mechanisms within the AML authority, and appoint and train personnel qualified as MLROs.

However, while clarifying certain aspects that are characteristic to the gambling sector, the AML instructions have also introduced excessive or unclear obligations, such as the operator’s obligation to perform a due diligence process (including identifying the ultimate beneficial owner), not only for customers/players, but also for each and every business supplier. This requirement may be considered excessive since the AML law itself does not impose this obligation.

The AML legislation imposes various obligations, such as:

  • specific customer due diligence;
  • reporting of suspicious transactions;
  • risk assessments;
  • implementation of AML policies; and
  • record-keeping in a specific format.

The observance of the advertising regime for gambling activities is primarily supervised by the ONJN. The National Audio-Visual Council and the National Authority for Consumer Protection can also technically supervise certain aspects of gambling advertising, depending on the situation.

In accordance with Law 158/2008, advertising is defined as any form of presentation of a trade, business, craft or profession, with the purpose of promoting the sale of goods or services, including immovable goods, rights or obligations.

Pursuant to GD 111/2016, any advertising of gambling activities must be performed in accordance with the legal principles in terms of the protection of minors and responsible gambling. Advertising materials cannot be placed within or on the boundaries of educational, religious or social-cultural premises, and must depict, in a visible manner:

  • minors’ interdiction from participating in gambling, shown through visual signs;
  • the series and number of the gambling licence; and
  • the ONJN logo.

The most notable restrictions in terms of advertising are the following:

  • the advertising of bonuses offered by online operators may be shown only on limited channels; namely, on the operator’s website, on the websites of its licensed affiliates or via e-messages sent to active players who have opted in to receiving this type of commercial communication; and
  • based on a decision of the National Audio-Visual Council, corroborated by the interpretation of the audio-visual regulator, TV advertising of gambling may be shown only after 11pm, with the exception of betting activities, which may be promoted during live sports events.

The sanctions for infringing the advertising regime for gambling activities start with administrative fines and can theoretically lead up to the suspension or revocation of the licence.

Notification of the ONJN

Since July 2022, the amendments brought to gambling legislation have imposed the obligation for gambling operators to notify the gambling regulator of advertising contracts for the promotion of gambling brands, platforms, applications or activities through the placement of advertising messages in localities and on public roads or using a television service, within five working days from the date of signing. Contracts concluded with sports entities or federations which entail advertising in stadiums or sports halls do not fall under this requirement.

The 5% Tax

Operators owe a 5% tax (this is a new tax, introduced as of July 2022) of the value of the above advertising contracts, payable by the 25th day of the month following the one during which the contract is concluded. In case of those contracts entailing recurring payments/instalments, the payment obligation of the new tax is due on the last day of the month when the instalment is due. The tax authority has issued an order regulating how this new tax needs to be reported. It is however unclear, even at this stage, who should pay this tax (eg, operator, advertising agency, etc).

Advertising Restrictions

Although several legislative proposals have been initiated in order to further restrict advertising for games of chance or entirely prohibit TV advertising in this area, this legislative proposal does not seem to gain further traction, and there are signs that advertising for games of chance in Romania may go through some rough waters in the foreseeable future.

In accordance with changes to Romania’s gambling legislation in July 2022, both B2C operators and B2B providers that hold a Class 2 licence in Romania are required to notify the gambling regulator should there be significant changes to the initial information on the basis of which the licence and authorisation were granted. According to the law, the meaning of the term “significant changes” should have been established through an order issued by the regulator within 30 days of the government ordinance coming into force (ie, by mid-August 2022), however, at the time of writing (November 2022), this piece of legislation had still not been enacted.

As summarised under 10.1 Disclosure Requirements, the order explaining the term “significant changes”, triggering the obligation to notify the gambling regulator, had not been released by the time of writing (November 2022). The applicable implications should therefore be assessed on a case-by-case basis.

Romanian gambling legislation does not list any explicit requirements in relation to passive investors in acquisitions or changes of control. The applicable obligations (if any) are to be determined on a case-by-case basis.

Depending on the type and severity of the breach, the ONJN has the power to suspend, revoke or even cancel gambling licences. Furthermore, the gambling regulator also has the competence to apply administrative fines if an operator infringes the licensing and authorisation conditions.

If a breach committed by an operator represents a criminal offence, the ONJN is legally obliged to refer the case to the relevant criminal investigatory bodies.

Sanctions are enforced either directly by the ONJN (in the case of a suspension, revocation or cancellation of the licence or other regulatory breaches) or in co-operation with other public authorities (eg, the tax authority, the police).

Since 2015, when the regulatory framework was reformed, there have been several notable cases where the ONJN has suspended or revoked both land-based and online licences, and even cancelled two interim online licences.

Financial penalties are generally enforced through the co-operation of the Romanian gambling regulator with the fiscal authorities. The law stipulates a certain range for pecuniary penalties, but technically the gambling office has the power to individualise a sanction.

In addition, it must be noted that all licensed operators are required to post a guarantee for securing the risk of non-payment of their tax obligations owed to the state. If an operator fails to pay the applicable taxes, the authorities are entitled to enforce the respective guarantee.

See 11.3 Financial Penalties.

There are no recent regulatory trends or updates in Romania in relation to social gaming.

In 2022, a legislative proposal was put forward to amend Law No 69/2000 on physical education and sport with the scope of regulating esports in Romania. However, the legislative proposal received a negative report from the Romanian senate and is now pending before the Romanian chamber of deputies, as the decisional forum.

There are no recent regulatory trends or updates in Romania in relation to fantasy sports.

There are no recent regulatory trends or updates in Romania in relation to skill gaming.

There are no recent regulatory trends or updates in Romania in relation to blockchain or cryptocurrency.

Land-Based Gambling Operations

In accordance with the gambling regulation, land-based gambling operations entail a physical presence in Romania. Thus, operators holding a land-based licence are established as Romanian companies and, as a result, they become subject to the general corporate tax provided by Romanian fiscal legislation. At the time of writing (November 2022), the general corporate tax is established as a 16% profit tax.

Exceptionally, for operators of land-based casinos only, if the profit tax deriving from this activity does not exceed 5% of the revenues, the respective casino operator is subject to corporate tax capped at 5% of total revenues (turnover, not GGR).

Online Gambling Operations

In the case of online gambling operations, the fiscal regime may differ depending on the jurisdiction of incorporation. Obtaining an online licence does not necessarily require operation as a Romanian incorporated vehicle. Any company established in an EU or EEA member state (or under the Swiss Confederation) may apply for a licence in Romania. In fact, at the time of writing, most operators holding an online licence in Romania are incorporated outside Romania, in other EU jurisdictions.

As such, an operator holding an online licence in Romania as a foreign company is not subject to corporate tax in Romania, unless the respective operation generates a permanent establishment in Romania. However, if the online operator is incorporated as a Romanian company, the respective operator will generally be subject to the 16% profit tax indicated above.

The tax regime and rules/distinctions summarised above also apply to B2B providers holding a Class 2 licence in Romania.

Taxation of Players

Besides the increases in taxes owed by gambling operators and suppliers, the taxes owed by players for revenues obtained from gambling also increased in 2022. See 4.3 Recent or Forthcoming Changes.

It is worth pointing out that in the case of online gambling the Fiscal Code already imposed a withholding tax mechanism applicable whenever the player makes a transfer from their game account to their bank account (or other withdrawal method). Hence, at each withdrawal from the online platform, operators must apply the taxation thresholds listed in 4.3 Recent or Forthcoming Changes.

It is also worth noting that for certain categories of land-based gambling (ie, casinos, slot-machine halls, scratch cards organised by the National Lottery and poker clubs) players still benefit from a tax exemption that is applicable for revenues that do not exceed RON66,750 (approximately EUR13,000).

National Cultural Fund Tax

Furthermore, the law adopted by the Romanian parliament in November 2022, amending the legislation in the field of cultural activities, introduced a new payment obligation in the form of a contribution to the National Cultural Fund. This contribution amounts to 0.5% of the revenues obtained by “economic operators in the field of gambling”.

It is at present unclear who the “economic operators in the field of gambling” are, and what “revenues” means in the context of this new payment obligation.

The year 2022 has brought the most significant changes to Romania's gambling legislation since the initial reformation of the legal framework that took place in 2015–2016. While certain amendments are welcomed, as they clarify and modernise the legislation, others seem to have been enacted with the sole purpose of creating new revenue streams for the Romanian State (such as the new 5% tax on advertising contracts, detailed under “Recent or Forthcoming Changes” in 9. Advertising).

SIMION & BACIU

45 Washington Street
Bucharest 011793
Romania

+40 31 419 04 88

+40 31 419 04 88

office@simionbaciu.ro www.simionbaciu.ro
Author Business Card

Trends and Developments


Authors



SIMION & BACIU is a business law firm that brings a fresh perspective and strives for excellence while offering legal services with a high regulatory content. The team consists of over 20 lawyers and counsellors, working closely with five business support professionals, to provide a tailored relationship model to clients and business partners. The firm's operation is based on a consulting-litigation matrix structure in the following main areas of practice: intellectual property, gaming and gambling, technology and media, consumer protection and advertising, data privacy and personal data protection, corporate law, M&A, life sciences and disputes resolution. The team adds concrete value through its services, giving clients a substantial advantage – regardless of the complexity of a project, it is very likely that the lawyers and professionals at SIMION & BACIU will have already dealt with a similar situation, although the team is equally prepared to solve untapped problems as well.

Introduction

The Romanian gambling market faced numerous challenges during 2020 and 2021, mainly due to the impact of the COVID-19 pandemic. However, the restrictions experienced during the past two years by the local market were essentially similar in nature to the measures applied in other jurisdictions, as the shut-down of operations or restrictions of day-to-day activities were, unfortunately, common throughout the world.

The year 2022 has been different (more accurately said, surprisingly different).

It would have been fair to anticipate that the aftermath of the pandemic would inherently reverberate on the health of the Romanian economy (and on the viability of the gambling sector). However, this year Romania has not only experienced economic inflation, but also legislative inflation, affecting the gambling industry from various (and in some cases, unexpected) angles. This article is a summary of the legislative changes that have already been enacted, as well as those proposals that may further impact the Romanian gambling field in the future.

The year 2022 has seen the most significant changes in Romanian gambling legislation since the initial reformation of the legal framework that took place in 2015–2016. While certain amendments have been welcomed, as they clarify and modernise the legislation, others seem to have been enacted for the sole purpose of creating new revenue streams for the Romanian State (such as the new 5% tax on advertising contracts, further detailed below).

Anti-money Laundering (AML)

After a considerable delay, Romania has finally implemented the Fourth and Fifth EU AML Directives.

The gambling regulator was required to issue the sectoral norms/instructions clarifying how the AML regime should be implemented in the gambling field in Romania and this piece of legislation should have been enacted at the end of 2019. However, the regulator’s instructions were issued two years later, being published at the end of 2021 and coming into force in January 2022.

These AML instructions are like a double-edged sword. On the one hand, the instructions clarify that the AML regime applies to all operators licensed in Romania, irrespective of their country of incorporation. This has enabled the regulator to put an end to a debate that has lasted several years, since in the past the AML office stated that the regime applied only to legal entities incorporated in Romania (it is important to note in this context that the majority of B2C online licences issued by the Romanian regulator until now have been granted to non-Romanian companies).

Also on a positive note, the coming into force of the AML instructions at the beginning of this year has ended an era of uncertainty, as it is now clear that gambling operators are subject to all the characteristic AML obligations, such as the requirement to conduct risk assessments, perform standard or enhanced KYC in certain scenarios, implement data retention obligations or appoint personnel qualified in the area of AML (money laundering reporting officers, or MLROs).

On the other hand, the AML instructions have introduced excessive or unclear obligations. For instance, the instructions stipulate that, if certain criteria are met (eg, a specific minimum turnover or a certain number of employees), operators must perform an audit confirming compliance with the AML framework. This audit must be performed every two years, but the instructions do not clarify what qualifications the auditor must have (if any) in order to conduct this procedure. Until the time of writing (November 2022), the regulator has still not offered any clarifications on this matter.

In addition, under the AML instructions, operators are obliged to perform a due diligence process (including the identification of the ultimate beneficial owner), not only for customers/players, but also for each and every business supplier. This requirement seems excessive since the AML law itself does not impose this obligation.

While the AML instructions have been in force for almost one year, it is quite clear that operators are still in the adaptation phase, so it remains to be seen how this situation will further evolve. The general impression of the market (at least at this stage) is that the authorities are not controlling the application of the new regime to check whether the AML obligations are actually being observed in practice.

Primary Gambling Legislation

In July 2022, the Romanian government passed an ordinance that significantly increased the taxes applicable to the gambling industry (taxation is detailed in the next section) and also amended the primary gambling legislation. Among the changes that have been enacted, the following are noteworthy.

  • Advertising contracts for the promotion of gambling brands, platforms, applications or activities through the placement of advertising messages in localities and on public roads, or using a television service, as well as any act modifying the initial value, must be communicated by the operators to the gambling regulator within five working days from the date of signing. Contracts concluded with sports entities or federations which entail advertising in stadiums or sports halls do not fall under this requirement.
  • Operators owe a 5% tax (this is a new tax, introduced as of July 2022) on the value of the above advertising contracts, payable by the 25th day of the month following the one during which the contract is concluded. In the case of contracts that entail recurring payments/instalments, the payment obligation of the new tax is due on the last day of the month when the instalment is due. The tax authority has issued an order regulating how this new tax needs to be reported. It is however unclear, even at this stage, who should pay this tax (eg, operator, advertising agency, etc).
  • The definition of remote casino games has been modified to clarify that the games also cover online slot-machine gaming and may be performed via one or several platforms (the new provision corrects an error of the legislator in 2015 when online slots were mistakenly left out of the definition of casino games – in practice they were, however, included in this category).
  • The new ordinance completes and further details the regime for raffles/tombola games (in the past, the regulator pointed out that the legislation needed to be updated in order to be able to issue licences for this type of game).
  • The deadline for the annual responsible gambling contribution has changed – following this government ordinance, the deadline is 25 January each year for existing licensees. For operators obtaining a new licence, the responsible gambling contribution for the first year is due within ten days of the approval of the application.
  • The regime for notifying changes to the initial licensing data has changed. The new ordinance states that this obligation applies to both B2C operators and B2B providers that hold a Class 2 licence in Romania. Further on, the ordinance sets forth that operators/providers must notify “significant changes” to their initial licensing data. The regulator should have issued an order clarifying what is meant by “significant changes” within 30 days of the government ordinance coming into force (ie, by mid-August 2022), but this piece of legislation had still not been enacted at the time of writing.
  • The regime/concept of “blacklist” has been expanded to websites, platforms, brands, trade marks, logos and gambling applications of unauthorised operators (prior to this ordinance, only websites were included on the blacklist). The same regime now applies to websites, platforms, brands, trade marks, logos and gambling applications that promote unlicensed gambling.
  • The government ordinance further clarifies that the sanctions of cancellation and revocation of a licence also apply to B2B providers (prior to this change the texts referred expressly only to B2C operators). In the case of cancellation, the new ordinance stipulates that the amounts of money obtained will be seized.
  • The ordinance introduces an exception from the general regime of minor offences in the sense that the sanction of warning as well as the benefit of settling a fine by paying half of the amount (if the payment is made within a certain timeframe) is not applicable to offences under the gambling legislation.

Subsequently, in November 2022, the Romanian parliament passed another bill aimed at further amending the primary gambling legislation. At the time of writing, the bill awaits promulgation by the Romanian president in order to be published in the official gazette and come into force (it is quite likely that this will happen before the end of 2022). Once in force, the new law will introduce the following new obligations:

  • in order to obtain authorisation to operate (the authorisation being, besides the licence, the other necessary permit for offering gambling in Romania), operators, both online and land-based, must prove the existence of a technical infrastructure to compile databases of self-excluded and undesirable persons; and
  • all gambling operators must keep electronic records of all persons accessing venues where gambling activities are organised and operated, as well as archive the electronic databases of self-excluded and undesirable persons, and keep them for a minimum of five years after their creation.

Non-compliance with these new obligations may result in the revocation of a gambling licence or authorisation. Once in force, these new requirements will probably have a significant impact on the land-based sector, as currently brick-and-mortar operators are not obliged to identify players entering a gambling venue, just strictly ensure that no minors are participating in games of chance.

Taxation

The government ordinance which amended the primary gambling legislation in July 2022 also considerably increased the taxes owed by licensed B2C operators and B2B providers and introduced additional new taxes. The most notable changes include the following.

  • The authorisation tax for online gambling has increased from 16% of gross gaming revenue (GGR) to 23%. It must be noted that the legislation provided for a minimum annual authorisation tax of EUR100,000 which has been increased to EUR120,000.
  • By comparison to the online sector, the authorisation tax for land-based fixed-odds betting increased from 16% to 18% of the GGR.
  • The annual licence tax for online gambling, before the legislative changes, ranged from EUR6,000/year (if the annual turnover was less than EUR500,000) to EUR120,000/year (if the annual turnover exceeded EUR10 million). After the changes, the licence tax now ranges from EUR15,600/year to EUR312,000/year. In practice, the gambling regulator has construed “turnover” as the total amount of bets, so it is very likely that an operator will have total bets exceeding EUR10 million and hence be obliged to pay the maximum licence tax of EUR312,000/year.
  • The annual licence fee for Class 2 licensed B2B providers increased from EUR6,000/year to EUR9,500/year. In addition, the regulator also requires B2B licensees to pay an administrative tax for the issuance of the licence in the amount of EUR9,500 (not as an annual payment, but only at licensing stage).
  • The annual authorisation tax for land-based slot-machine gambling increased from EUR3,600/machine to EUR4,600/machine. It is important to emphasise that slot machines are the most popular form of land-based gambling in Romania (estimates suggest that more than 60,000 machines are operated in the market) and that an operator must have at least 75 authorised slot machines in order to maintain the validity of its licence.
  • A new administrative tax of EUR150 has been introduced for the analysis of documentation related to the integration or recertification of new online games. While the amount of this new tax is not significant in value, it must be noted that, under the law, any new online game intended to be offered in Romania must receive prior approval from the regulator. This administrative tax is not, however, owed per individual game, but for each individual approval request submitted by an operator (and a single request can technically include hundreds of games).

Besides the increase in taxes owed by gambling operators and suppliers, the taxes owed by players for revenues obtained from gambling have also increased. The Fiscal Code has therefore been amended by a government ordinance and, starting 1 August 2022, the tax on gambling income obtained by players from most of the categories of games of chance has increased as follows:

  • for revenues up to RON10,000 (approximately EUR2,000), the tax increased from 1% to 3%;
  • for revenues ranging from RON10,000 to RON66,750 (approximately EUR13,000), the tax has increased from 16% to 20% (calculated on the amount exceeding RON10,000); and
  • for revenues exceeding RON66,750, the tax has increased from 25% to 40% (as per the current regime, in this case, a player must pay tax of RON11,650 plus 40% on the amount that exceeds RON66,750).

It is worth pointing out that in the case of online gambling, the Fiscal Code has already imposed a withholding tax mechanism applicable whenever the player makes a transfer from their game account to their bank account (or other withdrawal method). Hence, at each withdrawal from the online platform, operators must apply the above taxation thresholds.

It is also worth noting that for certain categories of land-based gambling (ie, casinos, slot-machine halls, scratch cards organised by the National Lottery and poker clubs) players still benefit from a tax exemption that is applicable to revenues that do not exceed RON66,750 (approximately EUR13,000).

New Contribution

Besides the tax increases summarised above, the gambling industry took another hit in November 2022. Thus, via a law that amended the legislation in the field of cultural activities, the Romanian parliament also introduced a new payment obligation in the form of a contribution to the National Cultural Fund. This contribution amounts to 0.5% of the revenues obtained by “economic operators in the field of gambling”.

At the time of writing, it is still unclear who are the “economic operators in the field of gambling” and what “revenues” means in the context of this new payment obligation.

Advertising

Gambling advertising (or more specifically, the limitation or prohibition of this type of advertising) has been a recurrent topic that emerges from time to time in the political landscape. While, with certain limitations, gambling advertising is currently permitted in Romania (being intensively used by operators, especially in the form of out-of-home (OOH) advertising or TV advertising), it seems that political stakeholders have started to look more carefully at this phenomenon. Various bills have been proposed throughout the years (some still pending) aimed at further restricting advertising for games of chance, and the latest initiative in this sense emerged in April 2022 when an MP from a minority party declared that a bill should be drafted in order to entirely prohibit TV advertising of games of chance. Although this legislative proposal does not seem to have gained further traction, there are signs that advertising of games of chance in Romania may go through some rough waters in the foreseeable future.

SIMION & BACIU

45 Washington Street
Bucharest 011793
Romania

+40 31 419 04 88

+40 31 419 04 88

office@simionbaciu.ro www.simionbaciu.ro
Author Business Card

Law and Practice

Authors



SIMION & BACIU is a business law firm that brings a fresh perspective and strives for excellence while offering legal services with a high regulatory content. The team consists of over 20 lawyers and counsellors, working closely with five business support professionals, to provide a tailored relationship model to clients and business partners. The firm's operation is based on a consulting-litigation matrix structure in the following main areas of practice: intellectual property, gaming and gambling, technology and media, consumer protection and advertising, data privacy and personal data protection, corporate law, M&A, life sciences and disputes resolution. The team adds concrete value through its services, giving clients a substantial advantage – regardless of the complexity of a project, it is very likely that the lawyers and professionals at SIMION & BACIU will have already dealt with a similar situation, although the team is equally prepared to solve untapped problems as well.

Trends and Development

Authors



SIMION & BACIU is a business law firm that brings a fresh perspective and strives for excellence while offering legal services with a high regulatory content. The team consists of over 20 lawyers and counsellors, working closely with five business support professionals, to provide a tailored relationship model to clients and business partners. The firm's operation is based on a consulting-litigation matrix structure in the following main areas of practice: intellectual property, gaming and gambling, technology and media, consumer protection and advertising, data privacy and personal data protection, corporate law, M&A, life sciences and disputes resolution. The team adds concrete value through its services, giving clients a substantial advantage – regardless of the complexity of a project, it is very likely that the lawyers and professionals at SIMION & BACIU will have already dealt with a similar situation, although the team is equally prepared to solve untapped problems as well.

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