Romania has to open the doors for online gambling

The presence of Mrs. Rossitter in Romania was a strong indication about the importance of our country on the international online gambling market.

Romania is one of the latest European countries to regulate a market which, with a proper legislation and administration would significantly increase the tax collected by the Romanian Government. We’re talking about the online gambling industry which for the moment is outside the regulated market in Romania.

”Knowing the best European practices in this field, for a better regulation of the legislative framework in Romania, this can bring only positive things for all stakeholders: the state budget, by significantly increased incomes, the gambling organizers, by stopping unfair competition from unauthorized operators, and for the consumers – through the safety and protection offered by the state authorities for participation in authorized games”, is the opinion of Mr. Dan Ghita, President of ROMBET – Gambling Organizers’ Association.

ROMBET recently invited Mrs. Sue Rossiter, Director of projects and policy with the Remote Gambling Association, a leading voice for the international online gambling industry.
In a recent discussion with Mr. Dan Ghita and Mrs. Rossitter we wanted to clarify some aspects of the gambling market in Romania, especially in the area of online gambling.

Mr. Ghita, what is Rombet’s position on the de facto opening of the Romanian online gambling industry?

Dan Ghita: Unfortunately we are amongst the last countries in the EU to take steps in this field – an industry which can significantly increase the budget revenues from gambling insdustry. However, there is a positive side of this story: backed by experience and information from other countries, we can avoid mistakes in regulating this new field. The presence of Mrs. Rossitter in Romania was a strong indication about the importance of Romanian on the international online gambling market. RGA has contributed at every EC recommendations regarding the online gambling. So, we can say that we received guidelines from one of the most experienced expert from this industry.
Mrs. Rossiter transmitted the following message to the Romanian authorities: “We expect gambling legislative changes in Romania. When we will know what the tax level will be and what are the costs, only then we will think of investing in this country. Until then, it’s too much uncertainty for us. ”

Do you see the licensing of online operators as a threat to the land based ones?

Dan Ghita: Not at all! This is a myth, as being already demonstrated by any other country. Players who prefer to play online have a different profile than those who prefer to play in land based locations. Moreover, in countries where online gambling was regulated, there was an increase of the industry as a whole, which means that both segments work complementary. For example, all the marketing effort undertaken by a licensed online operator helps the whole industry increasing.

Mrs. Rossiter, you said that “Romania is a good market”, then you added that the tax system is the main enemy to any company who’d like to invest in online gambling here. How could we meet in the middle?

Sue Rossitter: When considering whether to enter into a newly regulated market, a business will calculate total cost of their operation. So for online gambling business this includes associated business taxes, license fees, administrative and compliance costs, as well as the actual tax rate. The sum of these expenses, in addition to the costs of market entry such as advertising, can be considerable. Consequently, if the tax regime is not viable, it will prevent operators from taking up licenses. Our major concern at the moment is the withholding tax and we understand that there is a move to remove this major obstacle which we welcome.

What should be Romania’s next step in order to speed up the online gambling legalization process?

Sue Rossitter: It is important to get the legislation right as without a workable tax and regulatory regime operators will not take out licenses. The Advisory Council is the best way to discuss and develop the right regime. We are pleased to be part of the process and want to keep being involved.

Since you have members in the RGA that have licenses in almost any jurisdiction in the world, which country do you think has the best conditions for everybody: state, operator and player and why is that?

Different markets suit different operators so there is no single best market but markets that have been the most successful are the most open e.g. Denmark, Great Britain and with newly permitted online slots and betting exchanges we expect Spain to become a more attractive market.

How far do you think it is to have some general guidelines in the online gambling domain at the EU level? Is the RGA taking steps towards this objective?

Sue Rossitter: The RGA was instrumental in developing the CEN agreement on social responsibility. This is a Europe wide measure which sets standards on social responsibility and produces a robust framework that addresses the key issues associated with problem and underage gambling. It provides members of the RGA with a range of measures that will enable operators to help the small minority of their customers that have, or fear developing, a gambling problem. We encourage all regulators to set the CEN standards into law. We actively seek engagement with regulators in each European jurisdiction to keep crime out of gambling.

What do you think about Rombet efforts to unify all stakeholders in the Romanian gambling market and what do you think about RGA’s partnership with them?
Sue Rossitter: The RGA welcomes ongoing co-operation with Rombet to create a vibrant market for all gambling operators in Romania. Where we have shared interests we can and will work together. It looks like 2014 will be an eventful year for gambling operators and we want it to succeed for all stakeholders.

Mr. Ghita, Rombet has almost completed a study on gambling regarding specific legislation in several EU countries. Could you please reveal us the most important aspects pointed out so far by your study.

Dan Ghita: Through our comparative study we want to place Romania on the legislative and taxation framework in other EU member states. We have already seen that in Romania we got one of the highest gambling taxes across EU. If we add up the latest legislative uncertainty, this situation is likely to completely block the gaming industry in our country.
An industry which, we must not forget, means a market of about one billion euros annually, out of which a significant amount goes into taxes. Not to mention that more than 40,000 people are employed – directly or indirectly – in the entire gambling industry.
Another conclusion of our study relates to online gambling, which by the means of our current legal framework is basically not allowed as a commercial activity. We want the authorities to understand that everyone could benefit from authorizing the online gambling in Romania.

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