By Ana Maria Calancea, Associate Lawyer Mihai Luca Law Office
The year 2019 started with a series of legislative news of great interest for the gambling industry in Romania. On December 29, 2018 was published in the Official Gazette of Romania, the Government Emergency Ordinance no. 114/2018 on the introduction of measures in the field of public investments and fiscal-budgetary measures, in which the new conditions for the conduct of gambling activities are stipulated.
In the following we will consider the changes to the special legislation in the field of gambling.
According to the provisions of art. 53 of GEO no. 114/2018, starting January 1, 2019, organizers of remote gambling (online) have the obligation to pay a monthly fee of 2% of the total participation fees collected monthly. Remote gambling organizers are required to declare and pay the aforementioned fee up to the 25th of the month following the month in which the participation fees were collected.
The text of the ordinance does not indicate how the tax is calculated, but stipulates that it will be established by order of the President of the National Gambling Office. Regarding the way of declaring and paying the tax, art. 53 par. (3) of OUG 114/2018 provides that these are established by an order of the President of the National Agency for Fiscal Administration. Considering that on January 25, 2019 the payment of the tax for the month of January becomes due, it is likely that the abovementioned orders will be published shortly, setting out both the method of calculation and the way of declaring and paying of this tax.
Apart from this tax, GEO no. 114/2018 establishes in the art. 58 contribution due to organizers to combat the negative effects of gambling, as follows:
(i) I Class Licensed remote gambling organizers – 5,000 euros annually;
(ii) legal entities directly involved in traditional and remote gambling II Class licensed – 1,000 euros annually;
(iii) remote games state monopoly Class III – 5,000 euros annually;
(iv) traditional licensed gambling organizers – 1,000 euros annually.
Under the new regulation, the aforementioned contributions are the revenue generated by the activity, which will be used to prevent gambling addiction, being allocated to activities and programs to protect young people and gamblers, prevent and treat gambling addiction, achieving responsible promotion and advertising, prompt and effective settlement of disputes between a gaming organizer and a player, under the conditions and according to the procedure established by order of the president of ONJN.
Article 92 of GEO no. 114/2018 provides that gambling organizers also owe their contribution for the period 2015-2018, with the ONJN having to send notifications to operators within 30 days of the entry into force of the Ordinance, the payment being due within 5 days from receipt of the notification.
We make it clear that in the old regulations there was an obligation of gambling organizers to pay a contribution to the Gambling Addiction Prevention Fund, the amount of the contribution being the same as that provided by the new normative text. In essence, the obligation to pay this contribution subsided, with only its beneficiary being changed (now the beneficiary of the contribution is an activity financed entirely from the public revenues that will be set up next to the National Gambling Office).
Although the obligation to pay the contribution was provided by law in 2015, for administrative reasons, the Gambling Addiction Prevention Fund has never been set up, which is probably the reason for the legislator for which he retroactively imposed the payment obligation of the contribution.
In essence, the obligation to pay the contribution subsided, changing only its beneficiary.
Another important change is the increase of the authorization fee for slot machines. Under the new provisions, the operating license fee for each class A-slot machine was increased from 2,600 Euros / year, as set out in the previous regulation, to 3600 Euros / year.
We mention that the new regulation has eliminated the bonus for full advance payment of the annual operating license fee for casino and poker gambling, as well as slot machines.
Last but not least, we mention that some changes have also occurred with regard to the final destination of the special duty charged to video lottery operators (VLT). If before 1 January 2019 it was expressly stipulated that the special 3% tax applied to the gambling income of the licensed operator was allocated by law to the Ministry of Youth and Sports in order to encourage the national sports movement and to finance sports clubs, the regulation merely states that this tax is fully paid to the state budget.