Obligation of gambling organizers of notification of affiliate contracts
By Ana Calancea, C.A. Luca Mihai Catalin
In the following we propose an analysis of the provisions of art. 12 para. 2 of the GEO no. 77/2009 on the organization and operation of gambling (hereinafter referred to as GEO 77/2009) in order to determine what changes are made to the initial data under which the license to organize or operate online gambling was issued which must be brought to the attention of the National Office for Gambling.
According to art. 12 para. (2) “Gambling economic operators shall notify the ONJN, within 48 hours by filing online or within 5 working days from the date of registration, for submission by mail or at the ONJN registry, of any change to the initial data on the basis of which the gambling license or gambling license has been issued, as appropriate.“
From the way in which the normative text was drafted, it appears undoubtedly that the purpose pursued by the legislator is to bring to the attention of the National Gambling Office only the situations that are likely to modify the considerations considered by it for issuing the organization license and the authorization to operate the activity.
According to the legislation in force, the initial data / considerations taken into account by ONJN for issuing the organization license and the authorization to operate the online gambling activity are those expressly and unequivocally provided by the provisions of art. 15 of GEO no. 77/2009, respectively:
“(1) In order to obtain a gambling license from the Supervisory Committee of the O.N.J.N. the following conditions must be met:
A. For traditional games of chance, you must:
a) economic operators to prove:
(i) the existence of a “gambling organization” as its main object of activity;
(ii) the existence of the opinion of the police bodies given to the legal representatives, as well as to the associates / shareholders of the legal person;
(iii) the establishment of the subscribed and paid-in share capital and the guarantees in the amount provided for in this emergency ordinance;
b) the legal representatives of the legal person to submit a declaration on their own responsibility stating that:
(i) the economic operator has not been convicted by a final conviction for which rehabilitation has not taken place;
(ii) is not in a state of incompatibility, according to the law;
(iii) the identity of the real beneficiaries, as defined in Law no. 656/2002 for the prevention and sanctioning of money laundering, as well as for the establishment of measures to prevent and combat terrorist financing, republished, with subsequent amendments, as well as the fact that they were not convicted by a final conviction for which he did not rehabilitation has taken place for an offense provided for in this emergency ordinance or for another offense committed with intent for which a sentence of at least 2 years with imprisonment has been applied and is not in a state of incompatibility, as regulated by law;
(iv) no administrative measures have been taken against the legal person – such as the cancellation, revocation or suspension of the license or of the entire activity carried out by the gambling operator, for a period of one year before the date of submission of the license application;
(v) there have been no shareholders and/or directors in the last 3 years in companies that have declared bankruptcy;
c) the legal representatives of the legal person to submit criminal record certificates or other documents issued by the competent authorities whose area of competence is the last known domicile / registered office, from which it results that against any of the legal representatives of the legal person pronounced a final court decision for which there was no rehabilitation, in Romania or in a foreign state, for an offense provided for in this emergency ordinance or for another offense committed with intent for which a minimum sentence of 2 was applied years in prison;
d) the economic operator has submitted an application for obtaining the authorization to operate gambling in the category of those regulated by this emergency ordinance and under the conditions imposed by it.
B) For remote gambling, economic operators must prove cumulative compliance:
(i) the conditions set out in point A;
(ii) that they have a bank account for depositing players’ funds opened with a Romanian bank;
(iii) that the central computer system of the organizer has a system for registration and identification of participants in the game, as well as a system for storage and transmission in real time to a mirror server and a firewall, located in Romania and placed free at the disposal of ONJN, of the simultaneous gambling sessions, of each participation fee placed by each player, as well as the winnings paid to each player. (…)
(iv) that the software used for remote gambling and any new version of the software used for remote gambling have been previously approved by the O.N.J.N., based on tests performed by a licensed laboratory;
(v) the existence of an “authorized representative” of the company, if it is registered in another Member State of the European Union or in another signatory to the Agreement on the European Economic Area or in the Swiss Confederation, (… )
(vi) that the game server and firewall ensure the storage of all data regarding the provision of remote gambling services, including the registration and identification of players, bets placed and winnings paid. (…)
(vii) that communications equipment, other than that of providers of electronic communications networks and services, as defined in Government Emergency Ordinance no. 111/2011, approved with amendments and completions by Law no. 140/2012, with subsequent amendments and completions, must perform both the geographical location of the IP address and the identification of the date, time and duration of the game session of the player who registered himself as a participant in a game on the organizer’s website. (…)
(viii) that the communication equipment and the central point where the central computer system of the organizer will be located are on the territory of Romania or on the territory of another Member State of the European Union or on the territory of another Member State of the Agreement on the European Economic Area or in the Swiss Confederation;
(2) In order to obtain an authorization to operate gambling, economic operators must prove that:
a) hold a gambling organization license valid on the date of submission of the application for the authorization to operate gambling or have submitted an application for a gambling organization license;
b) the proposed location is registered at the trade register office by the organizer in question according to the legal provisions in force for carrying out commercial activities within the buildings and meets the requirements provided in the rules of application of this emergency ordinance;
c) the proposed space is not located within an educational establishment, including its related campuses, cultural, art, health, social, religious and similar establishments or in the delimited perimeter intended for them; (…)
d) the casino type activity is to be organized in buildings that do not have a residential destination or in locations that are part of hotels with a classification, according to the national norms in force, of at least 3 stars;
e) the means of play and the proposed locations/areas meet the conditions provided in this emergency ordinance and in the norms of its application;
f) the slot-machine gaming equipments are connected by means of independent computer programs, unique at the level of the organizing company, with the obligation to centralize in a centralized computer system located on the Romanian territory the information to highlight: each connected gaming device, location in which it is operated, the total participation fees collected and the total prizes awarded, including jack-pots. (…)
g) the betting shops will be operated through independent computer programs, unique at the level of the organizing company, regardless of the number of locations where the activity takes place, with the obligation to centralize in a centralized computer system located in Romania the information to highlight each connected game terminal, the total participation fees collected and the total prizes awarded. (…)
i) they have all the technical equipment that ensures the support for the organization and transmission of these types of gambling obligatorily on the Romanian territory, for the remote gambling defined in art. 10 para. (1) lit. h) -n), exception to this provision by economic operators authorized in this field in a Member State of the European Union and who have the technical equipment necessary to operate in a Member State of the European Union, with the obligation to connect them to an information system mirror centerer connected to ONJN (…)
j) the additional conditions that must be met by the economic operator in order to obtain the organization license and the authorization to operate remote gambling provided in art. 10 para. (1) lit. h) -n) shall be regulated by the rules for the application of this emergency ordinance.”
As is easy to see, the initial data / considerations on the basis of which the ONJN grants the organization license and the authorization to operate remote gambling do not include information on suppliers or affiliates.
However, the recent practice of the Office has shown that the organizers of remote gambling must inform the authority, within the period provided for in the text of the law, of concluding any affiliation contract with licensed companies class II, the situation which, from in our view, it exceeds the purpose pursued by the legislator in enacting the norm.
At the same time, the provisions of art. 122 para. 3 of the Methodological Norms do not establish additional conditions for the issuance of the authorization to operate the activity, but lists the documents that must accompany the application for its issuance.
Such a conclusion is unequivocally clear from the manner in which the text is drafted, (In order to obtain the license to organize and authorize the operation of remote gambling, economic operators will submit the documents provided in Annex no. 6a) and Annex no. 7, as well as the following documents in Romanian: (…), but also from the fact that the list of suppliers cannot represent a condition of authorization and, therefore, cannot be the object of the authority’s analysis, the economic operators having the freedom to decide the conclusion or termination of legal relations according to the general law.
Exceptions to this rule are expressly provided by law and may not be extended to similar situations (by way of example, Article 138 of the Methodological Rules provides that the Economic operator requesting authorization to operate the gambling activity at a distance must hold the certification software or gaming platform, performed by a specialized company, which holds a class II license issued by ONJN.)
An interpretation by reduction to absurdity would lead to the (unacceptable) conclusion that the authority could refuse to grant the operating license on the grounds that the company did not conclude affiliation contracts or other contracts listed in the text of the law or that the application was rejected it could be motivated by the conclusion of contracts with certain suppliers.
Additionally, we specify that the obligation to notify the authority regarding the conclusion of the promotion contract in the affiliation system with the gambling organizer rests with the affiliate, according to the provisions of art. 150 para. 3 letter c) of the Methodological Norms, according to which:
c) the deed of the affiliate who does not communicate to ONJN, within 15 days from the date of conclusion, the affiliation contract concluded with a remote gambling organizer.
If the notification obligation would have been provided by the provisions of art. 12 paragraph 2 of GEO 77/2009, would have been devoid of substance and purpose for the affiliate to expressly provide a similar obligation, but with a different term.
However, considering the fact that the non-observance of the provisions of art. 12 para. (2) constitutes a contravention, being sanctioned with a fine from 20,000 to 40,000 lei, our recommendation is that, until the clarification of the interpretation of the provisions in question, the organizers of remote gambling to bring to the notice of the Office, in addition to the changes the initial date on the basis of which the online gambling license or operating license was issued, and the conclusion of contracts in the affiliate system.