Financial fiscal measures adopted in the field of gambling in the context of COVID-19
By Ana-Maria Calancea, Lawyer with Luca Mihai Catalin Law Office
Following the measures ordered in art. 2 of the Military Ordinance no. 1/18.03.2020 for the implementation of the provisions of art. 3-5 of Annex no. 2 to the Decree no. 195/ 16.03.2020 by which the state of emergency was established on the entire territory of Romania, starting with 18.03.2020, the organization and operation of gambling was suspended for the entire period of the declared state of emergency.
As can be easily seen, the activity of traditional gambling organizers in specialized locations froze for a period of about two months, which led, on the one hand, to a lack of revenue and measures to reduce current expenditure, and on the other hand, a series of doubts regarding the financial obligations incumbent on the operators during this period.
Thus, in the following, we intend to analyze the recent legislation to determine what are the obligations to pay specific fees in the field of gambling in the absence of activity, as well as the legal conditions that must be met immediately after the cessation of the state of emergency.
On 16.06.2020, it was published in the Official Gazette of Romania GEO no. 48/2020 on some financial-fiscal measures (hereinafter referred to as GEOno. 48/2020), a normative act that provides for a series of derogations from the provisions of common law in the field of gambling.
According to the provisions of art. VIII alin. (1) and (2) of GEO no. 48/2020, the gambling operators whose licenses for organization and / or authorizations for the operation of gambling fall under the incidence of art. 332 of the Government Emergency Ordinance no. 1/1999 on the state of siege and the state of emergency (hereinafter referred to as GEO no. 1/1999), may make requests for re-authorization of the activity no later than 90 days from the date of cessation of the declared state of emergency.
Unfortunately, this text did not bring a novelty to the legislative framework, as the provisions of art. 332 of GEO no. 1/1999 with subsequent amendments and completions, establish that: the validity of the documents issued by public institutions and authorities is maintained throughout the state of emergency, as well as for a period of 90 days from the cessation of these states.
Thus, from a simple analysis of the aforementioned provisions it could be easily deduced that gambling organizers whose licenses for organizing and / or operating licenses for gambling expire during the state of emergency will benefit, after termination of thr state of emergency, a period of 90 days to make requests for their renewal as these documents extend their validity with the same period of 90 days due to the fact that they were issued by ONJN, as a public authority.
Moreover, the provisions of art. 14 of the Decree no. 195/2020 specifies the same aspect, respectively, “during the state of emergency, the validity of the documents issued by the public authorities that expire during the state of emergency is maintained”.
Instead, art. VIII in para. (3) of the contents of GEO no. 48/2020, establishes a measure derogating from the provisions of GEO no. 77/2009, more precisely, during the state of emergency decreed in 2020, the payment obligations related to the authorizations for the exploitation of traditional games of chance are suspended.
Also, the new text of the law stipulates that the sanctions provided for in GEO no. 77/2009, with the subsequent amendments and completions, regarding the non-payment of the fees related to the gambling exploitation authorizations, if the payment of the taxes that fall under the provisions of par. (3) shall be carried out within a maximum of 30 working days from the cessation of the declared state of emergency.
From the way of drafting the above provisions, it results that art. VIII alin. (4) aims at suspending the obligations to pay the authorization fee that became due during the state of emergency declared.
In reality, these provisions grant traditional gambling organizers only a postponement of the payment of authorization fees due between 18.03.2020 – 16.05.2020, for a period of 30 working days from the end of the declared state of emergency.
Last but not least, we mention that in accordance with the provisions of art. VIII alin. (5) of the new normative act the gambling operators that fall under the incidence of par. (3), does not owe fees related to gambling operating authorizations for the entire period of the declared state of emergency. The text of the law in this paragraph refers to the fee for the operating permit for the period corresponding to the state of emergency.
To be more explicit, we will analyze the provisions of art. VIII alin. (3) and (5), by reporting the provisions of art. 14 para. (2) point (v) of GEO no. 77/2009 according to which: for slot-machine gambling, the authorization fee is due for each game and is paid in 4 equal quarterly installments, as follows:
For the first quarter – until the 25th of the month following the month in which the documentation was approved;
For the other quarters – up to and including the 25th of the last month of the quarter (March 25, June 25, September 25 and December 25) for the following quarter;
Specifically, the obligations to pay the authorization fee for the first quarter of 2020 for slot machines gambling expired on 25.03.2020. Therefore, in light of the provisions of art. VIII alin. (3) GEO no. 48/2020, the due obligation to pay the authorization fee, as well as the one previously stated, is suspended during the state of emergency, the economic operators subsequently benefiting from a term of 30 days to fulfill the payment obligation.
In contrast, gambling organizers do not owe an authorization fee for the two months (corresponding to the state of emergency) in the second quarter of 2020, a period of time in which they have not been active.
We appreciate that the legislative texts provided in par. (3) and (5) of art. VIII of the GEO no. 48/2020 are in a slight contradiction, not meeting the requirements of clarity, precision and predictability provided by the legislation of legislative technique as it does not explicitly mention which of the authorization fees are suspended and which are not due.
Also, art. VIII of GEO no. 48/2020 does not regulate the situation of the addiction fee, provided for the organizers of slot machines and video lottery gambling organizers, a fee that is paid together with the authorization fee. But as long as the law does not distinguish, we believe that uncertainty will arise as to whether the derogating provisions will also apply to this special tax.
As a novelty, we bring to the readers’ attention, the Report on the draft law for the approval of GEO no. 48/2020 on some financial-fiscal measures (L224/2020) of the Commission for budget, finance, banking and capital market of the Romanian Senate, aims to repeal in full the provisions of art. VIII.
It should be noted that in the event of repealing the provisions of art. VIII alin. (1) – (2) of GEO no. 48/2020, the operators whose license for organization and / or authorization to operate gambling expires / has expired during the state of emergency, will benefit from the term of 90 days from the cessation of the state of emergency in order to formulate the requests for reauthorization activity based on art. 332 para. (1) of the GEO no. 1/1999.
However, in the case of the adoption of the draft law (L224 / 2020), the organizers of traditional gambling will no longer benefit from any support from the state, being put in the situation of paying both the obligations to pay due authorization fees and the authorization fees due for the period of the declared state of emergency, within the terms and conditions provided by GEO no. 77/2009.
We specify the fact that the draft law for the approval of GEO no. 48/2020 on some financial-fiscal measures (L224 / 2020), which seeks to repeal the derogating provisions of GEO no. 77/2009, is being debated in the Senate, and will be voted on later, sent for debate to the Chamber of Deputies. We hope that the legislator will reanalyze the impact created by the lack of activity in the traditional gambling industry and will not repeal the financial-fiscal measures provided in the text of GEO no. 48/2020.
Last but not least, it is worth mentioning that the state authorities have declared the transition, starting with May 15, from the state of emergency to the state of alert, during which time any measures can be ordered that are necessary to remove the force majeure. In other words, there is a possibility that the activity of gambling organizers will continue to be suspended, so we are waiting with interest to find out if and under what conditions economic operators in this field will be able to receive their customers.