The practice of gambling in 2023
Opinions regarding the manner of compliance, for payment obligations or administrative procedures, recently established, in gambling activity
Article from the series “Gambling Practice“, by Anchidim Zăgrean, FedBet Vice President and President of ROMBET
In 2022, the year with the most new regulations in gambling activity, a series of financial obligations or additional administrative procedures have been established, and for their implementation a series of clarifications, rules or instructions on how to comply are required, for a conscious, correct and unified application.
We will review only a few of them, highlighting the opinions on the practical way of compliance and the way in which it must be acted to achieve the goals and objectives that the application of these new regulations entails:
1. The provision from art. 13, para. 3, of GEO 77 of 2009, as amended by Law 30 of 2022, according to which: “A percentage of 98.8% of the fees charged for obtaining the license to organize games of chance and the authorization to operate games of chance, the access fee provided for in para. (4), as well as the other taxes provided for in this emergency ordinance constitute income for the state budget, and by way of derogation from the provisions of para. (2) of art. 30 of the Fiscal-Budgetary Responsibility Law no. 69/2010, republished, a percentage of 1% of these fees is constituted as income of the Romanian Olympic and Sports Committee and 0.2% as income of the National Paralympic Committee.”
For compliance and unitary application, in accordance with the provision of the primary regulation, we must note that although it is all fees charged,for obtaining the license and authorization, as well as the other fees provided in the ordinance, the exclusive condition, for redistribution on the three destinations, it is represented by the fact that these taxes must constitute income to the state budget as well as the fact that they must be expressly contained in GEO 77 of 2009, as amended and supplemented up to this date. This is the reason for which obviously results that the distribution on the three destinations it should not include the administrative fees, which are owed directly to the ONJN and not to the state budget, and also not the fee, representing 2% of the total participation fees owed by online gambling organizers, by the fact that this obligation, against of the state budget, was established by GEO 114 of 2018 and as such is not provided for in GEO 77 of 2009. In conclusion, the administrative fees due to the ONJN, as a result of the provision of a service, as well as the 2% fee, which is not provided for in GEO 77 of 2009, must be transferred in full to the recipients established by law, respectively at ONJN and to the state budget;
2. The provisions of Law no. 326 of 2022 and according to which gambling organizers: “they have the technical means for compiling databases on self-excluded and undesirable persons; gambling organizers will identify the persons who enter the premises where gambling is organized and operated and will keep records, in electronic format, of their identification data. The databases set up at the level of the organizer are archived by his care and are kept for a minimum interval of 5 years from the set up; gambling organizers prepare, in electronic format, the databases relating to self-excluded and undesirable persons. The databases set up at the level of the organizer are archived by his care and are kept for a period of at least 5 years from the set up.”
It is quite easy to ascertain that these provisions, which complement GEO 77 of 2009, updated, establish a series of technical-administrative obligations, with high costs for gambling operators, without, however, any provision introducing any restriction, as regards the access to the locations where games of chance are operated, of undesirable or self-excluded players. Therefore, the compliance of gambling organizers follows, to comply with these provisions, strictly ensuring some databases, in electronic format, of a formal nature and which they must keep for a period of five years, as long as the law does not establish, concretely, what is the objective and purpose of neither these records, nor any restrictions on which involves them. Here we can recall, once again, the fact that according to a constant jurisprudence of the Court of Justice of the EU, regarding gambling “the restrictions imposed by the member states must be such as to ensure the achievement of the objective pursued and not exceed what is necessary for to achieve this goal.” In addition, it must be remembered, in this context, “that a national legislation can only guarantee the achievement of the invoked objective when it really responds to the concern regarding its achievement in a coherent and systematic way”. Therefore, in this case as well, as happens regularly, at the time of the adoption of this legislative norm, the provision of art. 6, para. 1 of Law 24 of 2000, updated, where it is required that: „(1) The draft normative act must establish necessary, sufficient and possible rules that lead to greater legislative stability and efficiency. The solutions it includes must be thoroughly substantiated, taking into account the social interest, the legislative policy of the Romanian state and the requirements of correlation with the set of internal regulations and of the harmonization of national legislation with community legislation and with international treaties to which Romania is a party, such as and with the jurisprudence of the European Court of Human Rights.”
3. The provision from art. 21, para. 1, lit. t of OG 51 of 1998, updated, whereby gambling organizers must share their income with: “The National Cultural Fund is an economic-financial instrument intended to support and realize cultural projects, whose own income comes from the following contributions:
t) a share of 0.5% of the revenues made by economic operators in the field of gambling, including for activities organized in the online environment.”
The implementation and compliance, in accordance with the above provision, raises several obstacles, difficult to overcome, and any of the solutions adopted by the economic operator, cannot offer guarantees that it has exactly respected the legislator’s wish, due to the fact that it is not clearly established in law, by definition, the value base to which the 0.50% contribution rate applies. But, due to the fact that the law establishes a contribution, at a rate of 0.5% of the income, this income should be in direct accordance with the gain and not with the income recorded in the accounting. It is the argument according to which economic operators, who carry out gambling activities, should calculate this contribution, using the level of gross profit achieved as a basis for calculation. This opinion results from the fact that, according to this provision, gambling organizers, should share the profit obtained from this activity with the National Cultural Fund. If, through the Methodological Norms adopted, as a result of this regulation, another basis of calculation is established, the economic operators in this field could be pushed towards a potential financial loss (in the conditions where the profit margin is below 0 .50% of the recorded accounting income). Here it should be mentioned that this adopted regulation does not comply with the provisions of art. 10, para. 2 of Law 500/2002 and according to which: “(2) It is prohibited to develop normative acts that create the legal framework for the establishment of revenues that can be used in the extra budgetary system, except for the provisions of art. 67.” nor those of art. 30, para. 2 of Law 69/2010 and according to which: “(2) The pre-allocation of budget amounts with a special destination to main credit orderers or sectors is not allowed. Allocations of budget funds for main authorizing officers of credits or sectors can only be made through the annual draft budget.”. We can also add the fact that, by adopting this rule, the provisions of a special regulation, GEO 77 of 2009, updated and which in article 15, para. 8 prohibits any additional payments other than those established by special law: “(8) The organization license and the authorization to operate games of chance allow the economic operator who obtained them to carry out the activity throughout the territory of Romania, without the need to obtain authorizations, approvals, additional fees, approvals or licenses from other authorities.”
4. The provision from art. 110, para. 22, of the Fiscal Code, under the following wording: „”The tax due in the case of income obtained as a result of participation in games of chance characteristic of casinos, poker clubs, slot machines and lotteries, with a value higher than the non-taxable ceiling of 66,750 lei, is determined by applying the scale provided in paragraph (2) on each gross income received by a participant, and the amount of 11,650 lei is deducted from the result obtained.”
And in this case implementation and compliance could lead to different solutions, adopted by gambling organizers, by applying different procedures, that is why I believe that a unitary method of application needs to be established, in the sense that this provision must be applied to all these types of gambling (characteristics of casinos, poker clubs, slot machines and lotteries), regardless of the way the activity is carried out, namely games of chance organized and exploited in the form of traditional games of chance or online games of chance.
The provision from art. 47, para. 3, letter h of the Fiscal Code and according to which the Romanian legal entity, which carries out activities in the field of gambling, cannot opt for the facility regarding the application of the special regime of micro-enterprises, paying income tax, and economic operators, which carry out these activities , are obliged to pay the profit tax.
In this case, implementation and compliance require, obviously, the exit of economic operators carrying out economic activities in the field of gambling, from this taxation system, procedure also valid for those who obtain these revenues as a result of a joint venture, with a gambling organizer, by registering the gambling revenues in their own accounting, based on the periodic statement through which the revenues and expenses are transmitted , as a result of the joint operation of this activity and based on the joint venture agreement.
The clear conclusion, derived from the above and always supported in the numerous previous articles, is that of the need for a full revision of the special rules regarding gambling activity, in full compliance with the constitutional principles regarding the quality, clarity, precision and predictability of the law.
We’ll be back with other opinions in the next issue of the magazine…
