The Romanian regulatory framework for gaming was reformed in 2015–16. This created a gambling market that can be generally characterised as robust in both its land-based and online sectors. In the past two years, however, the COVID-19 crisis has had a severe impact on the land-based gambling industry, which has faced continuous restrictions.
The year 2022 was characterised as a year of legislative inflation affecting the gambling industry from various (and, in some cases, unexpected) angles, where most notable changes concern the adoption in January 2022 of the AML Instructions applicable to the gambling sector, the increase in gambling taxes and the introduction of new obligations for Class 2 licensees (such as the notification of any changes made to the initial licensing documentation on the basis of which they had been granted the Class 2 licence). The trend of legislative inflation continued in 2023. Significant changes were made to the primary gambling legislation on 6 October 2023, which had a noteworthy impact on the operation of games of chance both in the land-based and online sectors, where the fees applicable in the sector were yet again increased (not even a year after their last increase).
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:
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:
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. Following the amendments to the primary gambling legislation which entered into force on 6 October 2023, the legislation now regulates only two categories of slot-machine gaming:
Electronic devices awarding winnings with limited risk were removed from the primary gambling legislation.
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 that take 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. Following the amendments to the primary gambling legislation which entered into force on 6 October 2023, slot-machine games with unlimited stakes and winnings and land-based bingo no longer qualify for operation under a temporary licence and authorisation.
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:
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:
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:
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:
Online gambling activities are defined as all games of chance – irrespective of whether or not they are expressly regulated by GEO 77/2009 – that:
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:
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:
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.
On 6 October 2023, government Emergency Ordinance No 82/2023 amending the primary gambling legislation entered into force. The new piece of legislation significantly impacts the gambling industry. Without intending to provide an exhaustive list, the main amendments are set out below.
The level of the guarantees for covering the risk of non-payment of taxes due to the state budget has been significantly increased (see 4.3 Recent or Forthcoming Changes).
At the time of writing (October 2023), several pieces of legislation that are relevant for the gambling industry are pending enactment. These include:
The public authority competent to supervise the Romanian gambling market is the 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 October 2023 significantly increased the taxes owed by licensed B2C operators and B2B providers. The most notable changes include the following.
Players’ tax on gambling income
Starting 1 August 2022, the taxes on gambling income obtained by players from most of the categories of games of chance are as follows:
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
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 the enactment, it was unclear who the “economic operators in the field of gambling” were and what “revenues” meant in the context of this new payment obligation. Later, through the implementing legislation, these two notions have been clarified: the obligation applies to B2C organisers and the 0.5% applies to the value of the GGR.
Romanian legislation regulates the following types of licences.
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 Romania or by exemption in the EU, EEA or Swiss Confederation may apply for a B2C licence and authorisation. Should the operator be based in the EU, EEA or Swiss Confederation, the company must register a permanent establishment for tax purposes in Romania as a requirement for obtaining the 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 legislative framework imposes the obligation to pay an administrative fee of EUR600 for the review of the licensing documentation and EUR250 for the review of authorisation documentation for land-based games of chance.
For an online licence, the applicant is required to pay an administrative fee of EUR3,500 for the review of the licensing documentation.
Both land-based and online operators are also required to pay a EUR10,500 fee for the issuance of the licence.
Furthermore, the application for a Class 2 licence is subject to payment of an administrative fee of EUR10,500 for the issuance of the 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 bingo games, to EUR200,000 per year for fixed-odds betting.
Land-based operators must also pay an annual authorisation tax, which is calculated by reference to the following criteria.
The legislation also imposes certain special taxes for the following categories of land-based gambling:
As a separate payment obligation, organisers of land-based games of chance are required to pay a responsible gambling contribution which has been increased as of 6 October 2023 from a flat fee of EUR1,000 per year for all types of land-based games of chance to a separate mechanism where the responsible gambling contribution is determined based on each type of games of chance. In this sense, by way of example, the responsible gambling contribution for fixed-odds betting is not set to EUR200,000, while mutual betting requires the payment of a responsible gambling fee of EUR50,000.
Annual Fees for Online Gambling
An operator of online gambling must pay an annual licence tax of EUR300,000 per year, irrespective of the annual turnover (previously, the annual licence tax was calculated by reference to the operator’s turnover, ranging from EUR15,600 per year to EUR312,000 per year.
The authorisation tax for online gambling is also paid on an annual basis and amounts to 21% of the income obtained from gambling activities (GGR), but cannot be less than EUR400,000 per year.
Online licensed operators are also required to pay an annual responsible gambling contribution of EUR500,000.
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 EUR250 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 EUR20,000 per licence and also a responsible gambling contribution of EUR15,000. The law simply stipulates that the contribution is EUR15,000, 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:
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 October 2023, the new government ordinance amending the primary gambling legislation was adopted by the Romanian government, the following changes being the most notable for land-based gambling.
Moreover, the requirements to prove the existence of a technical infrastructure to compile databases of self-excluded and undesirable persons and the obligation to 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, were removed by the new government emergency ordinance.
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. Moreover, as per the recent legislative amendments, starting 6 October 2023 the joint operation of games of chance can take place only based on an agreement concluded between licensed gambling organisers or between licensed gambling organisers and companies under common control with them.
In October 2023, 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. The changes include the requirement to operate games of chance only through a locally established company or by a company registered within EU, EEA or Swiss Confederation which registered a permanent establishment for tax purposes in Romania. Incumbent licensed companies not meeting such requirement on 6 October 2023 have a six-month transitory term to comply with the new requirements.
See 3.7 Recent or Forthcoming Legislative Changes for more details.
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 1,400 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 October 2023, the government emergency ordinance amending the primary gambling legislation introduced a new provision stating that the registry of self-excluded and undesirable persons will be held by ONJN, while operators will have real-time access to such registry. Previously, each organiser had the obligation to maintain such a registry at the company’s level. In this sense, requests for self-exclusion could be submitted to the ONJN or to the gambling operators. Now, gambling operators are obliged to send the requests for self-exclusion to the ONJN within two working days from the date of registration, and the lists of persons who, by internal decisions of the organisers, have been declared undesirable, together with the reasons for this measure, within five working days from the date of the drawing up or modification.
Regarding online gambling, the legislation specifically provides that the platforms must be designed to enable responsible gambling functions, such as:
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 October 2023, the government emergency ordinance amending the primary gambling legislation introduced a new provision stating that the registry of self-excluded and undesirable persons will be held by ONJN, while operators will have real-time access to such registry.
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:
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:
The most notable restrictions in terms of advertising are:
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 (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 (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 (October 2023), 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 (October 2023). 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.
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 (October 2023), 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. However, as per the amendments to the primary gambling legislation from October 2023, obtaining a licence by a company located in EU, EEA or Swiss Confederation requires the registration of a permanent establishment for tax purposes in Romania. Thus, any company established in an EU or EEA member state (or under the Swiss Confederation) may apply for a licence in Romania subject to having registered a permanent establishment in Romania. At the time of writing (October 2023), 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 and having a permanent establishment for tax purposes in Romania will be subject to corporate tax in Romania for the activities which are linked to the Romanian market.
The tax regime and rules/distinctions summarised above do not apply to B2B providers holding a Class 2 licence in Romania. For these entities, there is no requirement of registering a permanent establishment for tax purposes in Romania. Thus, the fiscal regime may differ depending on the jurisdiction of incorporation.
Taxation of Players
Besides the increases in taxes owed by gambling operators and suppliers, the taxes owed by players for revenues obtained did not change from 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”. Thus, the obligation applies to B2C organisers and the 0.5% applies to the value of the GGR.
The year 2023 has brought significant changes to Romania’s gambling legislation. 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, especially since the amendments enacted in October 2023 had the sole purpose of obtaining additional revenue, given the budgetary deficit issue Romania is currently facing.
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office@simionbaciu.ro www.simionbaciu.roIntroduction
The Romanian gambling market faced numerous challenges during the past couple of years, mainly due to the impact of the COVID-19 pandemic. The restrictions experienced in this time by the local market were 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 trend of legislative inflation affecting the gambling industry from various (and in some cases, unexpected) angles started in 2022 and continued in 2023.
Following a significant increase in taxes to be paid by actions in this sector mid 2022, the latest noteworthy changes were applied to the primary gambling legislation at the beginning of October 2023, with significant impact on the operation of games of chance in both the online and land-based sectors.
Anti-money Laundering (AML)
After a considerable delay, Romania has finally implemented the Fourth and Fifth AML Directives.
The gambling regulator was required to issue the sectorial 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 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 (namely, 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. At the time of writing (October 2023), 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
On 6 October 2023, government Emergency Ordinance No 82/2023 amending the primary gambling legislation entered into force. The new piece of legislation significantly impacts the gambling industry. Without intending to provide an exhaustive list, the main amendments are set out below.
Moreover, the requirements to prove the existence of a technical infrastructure for the compilation of databases of self-excluded and undesirable persons and the obligation to 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, were removed by the new government emergency ordinance.
The government emergency ordinance amending the primary gambling legislation introduced a new provision stating that the registry of self-excluded and undesirable persons will be held by the ONJN, while operators will have real-time access to such registry. Previously, each organiser had the obligation to maintain such a registry at the company’s level. In this sense, requests for self-exclusion could be submitted to the ONJN or to the gambling operators. Now, gambling operators are obliged to send the requests for self-exclusion to the ONJN within two working days from the date of registration, and the lists of persons who, by internal decisions of the organisers, have been declared undesirable, together with the reasons for this measure, within five working days from the date of the drawing up or modification.
Following these amendments, it is expected that the gambling operators currently active on the Romanian market will put their current activities under scrutiny. This may generate movements on the market, thus there is a chance that in the following period there will be transactions or business transfers related to the gambling activities carried out by some of the gambling operators to align with the new requirements or to best address such requirements from a corporate perspective.
Taxation
The government ordinance which amended the primary gambling legislation in October 2023 significantly increased the level of taxation throughout the industry. The most notable changes include the following.
Starting 1 August 2022, the taxes on gambling income obtained by players from most of the categories of games of chance are:
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).
National Cultural Fund Tax
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 the enactment, it was still unclear who the “economic operators in the field of gambling” were and what “revenues” meant in the context of this new payment obligation. Later, through the implementing legislation, the two notions were clarified: the obligation applies to B2C organisers and the 0.5% applies to the value of the GGR.
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. For example:
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