With Dan Ghiță, Executive President ROMBET about the gambling market in Romania
➤ Mr. Ghita, Romania is a very interesting market, where structure is exactly same as other territories. As we know, illegal operators’ websites are blocked but there still are several international operators who can run their business with international licenses. Could you elaborate more on this topic, how the market is regulated and what are the details in this regard?
Organisation and operation of online gambling in Romania are mainly governed by the provisions of Government Emergency Ordinance no. 77/2009 on gambling organisation and exploitation and the Methodological Norms for application of GEO 77/ 2009, approved by Government Decision no. 111/2016.
The activity may be carried out in Romania only by the legal entities having a licence to organize and an authorisation to exploit online gambling activities issued by the National Office for Gambling to those legal entities that satisfy the Romanian legal requirements. Illegal websites are indeed, monitored and blocked by decision of the Gambling Authority.
In accordance with the gambling legislation in force, the only Romanian authority able to grant licenses of organization and authorizations of exploitation for gambling activities is the National Gambling Office, a legal entity subordinated to the Romanian Government.
Within National Gambling Office operates the Supervisory Committee, a structure constituted by representatives of the authorities involved in gambling domain, directly or indirectly, having as main responsibilities:
i) granting gambling operators the licenses for organizing and authorizations to exploit gambling activities;
ii) issuing the licenses for the operators performing related activities for gambling operators, as required by the law;
iii) enforcing gaming regulations and internal rules applicable for licensed operators.
According to the legislation in force, online gambling activities include the activities carried out only through communication systems (internet, telephone or other similar means) and that involve the organiser’s random award of material winnings to the participant, charging direct or indirect fees, as per the Rules of the Game, issued by the operator and approved by the National Gambling Office.
This category includes different types of games: online casino games (which includes on-line roulette , slot-machines and poker), on-line betting (fixed-odds, pari-mutuel, betting exchange), bingo and keno or raffle.
License to organise online gambling activities may be granted to economic operators, Romanian or companies registered in a member state of the European Union, in a state that is a signatory party to the European Economic Area Agreement or in the Swiss Confederacy.
The license grants to the owner the right to organize on-line gambling activity for a 10-year period from the date of issuance, if the operator complies with the legal requirements and under the condition of payment of the license fee.
The annual fee for gambling organising licence is determined by reference to the organiser’s turnover and it has minimum value of 6000 Euro (for startups) or maximum 120.000 Euro, due by the companies with annual turnover higher than 10 milion EURO.
The relevant turnover shall not be connected only with gambling activity performed onto Romanian territory and the license tax shall be established based on all the incomes of the applicant for the previous fiscal year.
The authorisation to exploit online gambling activities is granted to operators holding a license to organize such activity or requesting simultaneously both documents.
The authorisation is valid for a period of 12 months since its issuance, that may be prolonged for similar periods, upon request of the operator and under the condition of proving that the basis for its issuance were not changed.
The annual authorization fee is 16% of the gross gaming revenues of the operator, but not less than 100.000 Euro. The minimum value of the tax shall be paid in advance, no later than the 25th of the month following the month when the request of the applicant was approved.
If the revenues exceed the minimum value (100.000 Euro), the tax is recalculated by applying the percentage shares to the revenues of the organizer. Recalculation is made monthly, for the entire licence period, starting with the first month when the estimated results are exceeded.
The operator should register within National Gambling Office a statement of revenues for each month, based on which the value of the tax shall be regularised; the statement should be submitted no later than on 10th of the month following the month referred to and payment should be performed until the 25th of the month following the month for which the payment is made.
A guarantee for the execution of payments toward Romanian State Budget, worth of 100.000 Euro/ game type is required for the purpose of the license and the authorisation.
➤ How many local licensed operators are presented in Romania today and how many international operators are allowed to operate?
Since the on-line market was regulated, in 2015, Romania has became an interesting destination for the foreign investments.
There are 31 on-line licenses valid, out of which only 6 are held by local investors. It is worth noting that there is a constant interest for the market and that, in the context of restrictions on limiting the spread of COVID-19, the number of licensing applications was incresing. This is for online.
For retail, there are more than 200 companies that have land base licenses and are operating live casino, slot machines and betting locations.
➤ What is the tendency of offline operators launching online operations? What was the covid effect on this trend?
Of course, due to the restrictions imposed by the Authorities to the offline operators for the purpose of limitating the spread of COVID-19, the tendency is to perform on-line activity rather than licensing or renewing the licenses for offline operations, the latter being unsecured and volatile.
Despite the support that Romanian Authorities have granted to offline operators, their activity has been strongly affected by said restrictions, consequently, while the investments have became uncertain, the operators have seeked additional protective measures. In this context, some of the operators have assessed the opportunities to extend their activity in the online environment.
Now, everybody is expecting the COVID-19 pandemic to finish and the retail business to slowly start recovering.
➤ Romania has the players’ taxation as well as operator taxes. How does it work, are the players liable for counting the taxes and are they paying or are operators undertaking this activity on players’ behalf?
Starting with 2018, all responsibility for calculating, withholding and paying the taxes corresponsing to gambling activities has been transferred to the companies. There is no demarche or proceeding that the players are required to accomplish in this regard.
Companies are obliged to pay to the State Budget the tax on deposit (2% of the transfer to the game accounts), while the tax on the winnings are collected and paid on behalf of the customers. All taxes must be paid up to the 25th of the month following the transfer to the game account or the payment to the customer (the withdrawal executed from the game account).
➤ For the international scale, what are the most interesting opportunities from Romania? Is it entering the market, or are there products or service providers who are innovative and could be significantly contributing to the international companies?
Beside the advantages of having a matured market, with a clear legislation, strongly adapted to the realities of the industries, international operators, as well as the Romanian ones, benefit of the presence of well-known and highly-appreciated suppliers, to which the access is granted in a facile and transparent manner, as the list of the Class II licensed suppliers is public, available on the webpage of the authority.
There are not to be neglected the very good internet connection, available throughout the territory, which is well-known worldwide, the Romanian professionals, ready to support the activity of international companies, as well as the appetite of the Romanian customers for on-line and retail products and the resonable level of taxation.
➤ Please tell us couple of words about Rombet and the approach of the association.
The Gambling Organizers’ Asociation – ROMBET has become, during a period of intense activity, marked by internal and international events, partnerships, seminars and direct interactions with the representatives of the industry, the most representative. association in the field of gambling in Romania, with more than 60 national and international members. The categories of companies that have chosen to become ROMBET members are from the following areas:
– Traditional operators of slot machines, from large companies – several thousand slots operated – to medium and small companies;
– Traditional operators of fixed-odds betting;
– Online games operators
– Online gaming platform developing companies;
– Companies that develop slot machine software, online and virtual games;
– Companies specialized in technical certifications, both in the on-line environment as well as in the traditional one;
– Companies that offer payment processing services for the online market;
– Companies providing software for interconnecting slot machines for the offline environment;
– Slot machines and AWP manufacturers.
ROMBET has contribute to the consolidation of the environment business from industry, with a special concern given to the collaboration with the National Gambling Office – NGO – and the development of programs in the area of Responsible Gaming. The ROMBET representatives are in permanent contact with the legislative and executive environment, with the local and central authorities: we intervene whenever the situation imposes it to stop certain initiatives that would harm industry, or to correct situations of non-enforcement in the unitary way.
A few weeks ago we had a meeting with minister of finance , Adrian Câciu , in which we discussed and brought to his attention the situation of the industry and the things that could be changed or improved in the legislation to be adapted to society and the times in which we live.
The ROMBET association is extremely active also internationally, having the most constant presence at international events, giving its members and the entire Romanian industry more representativeness.
During all these years ROMBET attended as a delegate or partner the following live and online events: ICE Totally Gaming – London, EGR – Prague, CEEGC – Budapest, SBC Betting on Sports – London, BEGE and EEGS – Sofia, Prague Gam Summit – Prague, VIGE – Vienna, Mare Balticum Ga- ming Summit – Vilnius, iGB Live – Amsterdam, SIGMA – Malta, WrB – London and many more.
“ROMBET will intensify the efforts to represent the interests of the Romanian gambling industry at national and international level, in thecontext of pandemic, which tested the entire economy, and especially the landbased gambling operators.
In addition, we have clear signs that many Romanian companies will start an expansion process in various countries in Europe, following the model of one of the largest members of the association.
Locally, we are convinced that the association will continue to grow – our current and future members are the ones around which we build our strategies. It is obvious that the market has matured, the competition has strengthened all aspects of the business, and the relationship with authority – either directly, at the level of NGO, or at a wider, legislative and executive level – will tend this year towards normalization.
Our association will continue to be an active pole of action and influence and we will try to permanently change the sentiment in the industry, from an almost defensive one to a leadership one, characteristic of the new global business environment.
We will always support through dialogue a modern approach to the field, which must evolve naturally at the same pace as technology and all the requirements of the society in which we live. We are campaigning for a transparent, balanced legislative framework, which offers a fair competitive evolution and at the same time does not create possible situations of double standard or abuses, said Mr. Dan Ghita, ROMBET President.