Interview with Dan Alexandru Ghita, President of ROMBET, about the current situation, but especially about how the industry is coming out of this crisis
At the heart of every difficulty is an opportunity
We are living in an unprecedented period of crisis, which has required immediate reactions from gambling organizers. There are many voices, which state with satisfaction that the representative professional associations have acted effectively, promptly pursuing the achievement of the objectives of all categories of gambling organizers.
➤ What were the steps of the professional associations?
From the first moments after the adoption of Military Ordinance no. 1/2020, by which the decision was taken to suspend all activities carried out in gambling locations, respectively from March 19, 2020, the professional associations, representative for the field of traditional gambling were in permanent contact. We analyzed the impact of these decisions on the market and formulated solutions and proposals for measures to support companies, so that the industry can withstand the absolute crisis situation we are in, being for the first time when activity in all locations is suspended and companies they are completely without income.
We brought to the attention of our members various scenarios and, after internal consultations, we managed to outline a series of minimal measures, which we materialized in working documents agreed at the level of the traditional gambling industry, which we then submitted authorities for analysis and decision. The efforts materialized in the support measures adopted by the Romanian Government, with reference to the field of gambling, reflected in the recently adopted regulations.
At the moment we are trying to initiate a second step, we are preparing some amendments with which we want to meet the authorities, which are meant to describe certain measures that the industry will take when the emergency situation arises and the companies they can start their activity. These measures are designed to ensure the activity of the industry in safe conditions while maintaining a high degree of protection of players and employees on the one hand and at the same time, we try to come up with some proposals on the tax and organization side to avoid entering insolvency or even in the bankruptcy of some companies in the field that are facing certain problems due to the period we are going through.
➤ What should the Government do to help the gambling industry?
Through the recently adopted regulations, the Government has already adopted a series of measures to support the economy and, in this context, the gambling industry. From my point of view, the industry needed applied, dedicated measures, which were more likely to prove their efficiency, with beneficial results for operators, but also for the authorities.
However, we are an important industry, with over 40,000 employees and which contributes, through taxes, 0.5-0.6% to GDP.
Despite the openness we found at ONJN for discussing possible solutions, the manner in which the rules were adopted shows a certain haste in the analysis of the associations’ proposals, which led to the adoption of perfectible normative acts. Although we understand that in this exceptional context, the urgency of taking action has been the priority of the governmental authority, we want to have a real dialogue and to be able to make available to central authorities the expertise we have to eliminate confusion and error.
Unfortunately, time has shown that, most of the time, the normative acts in the field were approved in a hurry and without a real consultation with the professional associations, often to the detriment of the operators, but also of the authorities. A weakly or incorrectly regulated industry is not productive and does not generate the taxes and duties estimated by the authority.
Despite the difficulties in establishing a real and effective dialogue at government level, which we attribute to the Government’s widespread concern to adopt short
term support measures for all economic sectors, I must welcome the openness to dialogue and the support that the industry has for received from the ONJN, probably at the highest level in recent years. Last but not least, the measures adopted, although perfectible, always being a place for improvement, are a real support for the organizers and, implicitly, for their employees. And at the same time, as I said earlier, after we submit the proposed new measures, we expect a dialogue from the Government with the industry from which to result the best measures we can take together, so that our activity can begin in first of all in the safest sanitary conditions for everyone, but we also want a detailed analysis, because, at the moment of reopening the field, the companies cannot support certain situations that may arise due to the new protection measures. With the new measures we will propose, we are firmly convinced that we can start the activity as soon as possible in conditions of maximum safety. We want a detailed analysis of the industry from the government because, in gambling locations, effective measures can be taken against fighting the virus, wearing a mask and gloves in conjunction with other methods of disinfecting locations and social distance is not a problem. Automatically the risk of contamination being much lower compared to situations in other industries.
➤ What does Rombet do to help its members?
Rombet did not suspend its activity during the crisis. We have always been active and available to our members and partners, being at the same time in constant dialogue with ONJN and other decision makers. We tried to respond promptly to all requests and questions from organizers, corporate clients, journalists or public authorities.
We were in constant dialogue with the members of the Association to ensure the success of the steps that were needed perhaps more than ever and that we, together with the other associations, undertook to help the gambling industry to overcome this period. We continue to strive for the best results for the industry. Moreover, we have opened a channel of discussions on social media, through which we can be notified of any atypical situation, any scenario or any problem that the business environment or anyone related to the industry would like to discuss. I want to let the industry know that we are with them and, if they need it, they can count on our full support.
➤ What action can a company now take to ensure that it successfully overcomes this crisis?
Like any other company whose activity has been suspended during the state of emergency, companies in the field of traditional gambling have only one option: to reduce costs to a minimum in order to be able to start again as soon as the situation will allow.
Depending on the financial capacity of each company, the cost reduction strategy may involve radical or more relaxed more optimistic and forward-looking measures.
If the state of epidemiological urgency is prolonged, it is certain that there will be companies forced to take drastic measures to reduce costs, given that in the budget projections of companies could not predict the situation in which the company would have to be absent full of income over weeks or months. Even if the budgets have been rethought to meet this challenge, the size of the cost reductions depends to a large extent on the duration of the epidemiological crisis, depending on which time to resume work will be determined.
We cannot rule out measures that will affect some of the organizers’ partners and employees. I am convinced that there is no company that does not regret the decisions to terminate some of the contracts, to reduce salaries or to send employees to technical unemployment. Such measures are, in some cases, the only remedies for the organization, being the role of management to ensure that they are applied progressively and proportionally to the needs of the company. One thing is certain: employees and employers, providers and beneficiaries of services, we all need to understand that only together we can get over this period and the financial crisis that is looming, there is simply no other solution!
➤ How do you think the operators will overcome the crisis? How high is the risk of insolvency and bankruptcy in the field of gambling?
What exactly will be the effects of this crisis in the field of gambling, but also in the economy as a whole, is very difficult to predict. It is an unprecedented crisis that tests us both as individuals and as entities. There are no miraculous solutions, decisions to be inspired by or lessons to apply as such. It takes courage, solidarity, firmness and creativity in making decisions. On the other hand, there are a series of questions to which there are no answers yet and according to which the future of companies will be decided:
– What is the duration of the epidemiological crisis and how deep will the economic crisis be?
– According to some scenarios, in the autumn and winter of this year, the epidemiological crisis will be repeated; with this new peak of the health crisis, will the measures to suspend the activity be put back into practice?
In addition, the situation of each company will be decided according to a number of variables, of which I would only list: the financial situation at the time this crisis began, it is clear that the pre-existence of financial problems will reduce the ability of companies to bear losses during this period; the duration of the health crisis, according to which, it will be established the possibility for companies to bear the expenses during this period and, last but not least, the ability of the management structures and the capacity to mobilize resources, correlated with the desideratum of the shareholders those who impose the direction of the company.
➤ What lessons will gambling operators learn from this crisis?
I belong to the category of those who believe that none of us will be the same after this crisis ends. The lessons we will learn at the individual level will certainly be reflected at the level of companies. If we have learned the lesson of solidarity, social responsibility and courage, I believe we will have stronger companies and more able to withstand crisis situations.
I would like to thank in particular the members of Rombet, but also the other gambling operators and our partners, who have chosen to be with us during this difficult time, proving that together we are strong and can overcome any challenge. , but also to the National Gambling Office for the involvement and understanding they have shown, essential in the success of the steps we have taken.
I will end on an optimistic note, conveying good thoughts to the operators and reminding them that, according to Albert Einstein, “At the heart of every difficulty is an opportunity”.
Thank you and good luck in the future