We are at the end of a year which will remain in history, marked by a major legislative change and by an imminent re positioning of the market. Therefore, we asked the ROMSLOT association members to make a balance of the industry, an analysis of what 2015 has meant for the slot machines market in Romania.
What can you tell us about the impact of the legislative change on the slot machines industry?
Viorela Rădoi, Executive Director of ROMSLOT:
Although the expectations were high at the beginning of the year, we were starting out a new year with a gambling legislation which had been substantially modified, as we can recall, the legislative change took place in the last days of 2014, and now, almost 12 months later, our members continue to claim the fact that the change of the gambling law is itself a positive one, but we cannot talk about quantifiable effects in their activity just yet.
The most often met argument of the positive aspects that our members noticed was the fact that those companies carrying out their activity on the edge of the law are taken out of the
market. The connection to the centralized computer system of ONJN will be an extra element for fighting the black market. It is a measure that ROMSLOT promoted and we were happy to find it in the law, but since the procedure for meeting the conditions and terms for connecting the devices is still unclear, it is possible that some operators might not be able to do it until the 31st December 2015 deadline.
Unfortunately, there are still many unclear things on the market, questions left without an answer and unpredictability.
Most problems come up from the fact that the methodological norms for implementing the law haven’t been published yet, and this is what causes most of the problems and uncertainties. I think we still need time before we can draw the line and clearly define what the impact of the legal changes was. But, at the present moment, the fact that measures such as increasing the licensing and authorization taxes or the obligation to connect the devices to the centralized computer system at the ONJN headquarters have imposed a rethinking of the business strategy is clear. For some operators this translates into a better managing of their business, which actually led to increasing their profitability.
Gabriela Manu, President of ROMSLOT and Managing Partner at Baum:
I am, in general, the type of person who sees the full half of the glass, and this is why I would rather concentrate on the positive aspects resulting after the legislative changes, which help
create a better and better regulated and transparent industry. A major effect I hope the new provisions will have is the elimination from the market of the counterfeit terminals and of the devices operated outside the law. Fighting the black area encourages the development of a transparent and competitive industry and offers security to the players. I have said it before and I keep saying it, AUTHORIZED means PROTECTED.
Jozsef Kalman, ROMSLOT member and General Director of Elmat:
I consider that the new legislation had, as a whole, a positive impact. It meant an analysis and a rethinking of one’s business, for instance we analyzed each location in part and gave up on the weak ones. Although we have reduced our locations number, profitability increased considerably. I think that the new legislative frame better understands the specificity of this industry and contributes to making it more effective.
How do you see the connecting of the machines and equipment to the centralized computer system at the ONJN headquarters by the end of December 31st?
Adrian Georgescu, member of the Board of Directors of ROMSLOT and CEO of Novomatic Group:
ROMSLOT has actively militated ever since its establishing against the black market and against the counterfeit equipments, which represent the main source fueling this market. The introduction of the obligation to connect all your devices to a centralized computer system at ONJN can only make us happy. We are convinced that this way an extremely well controlled frame for the operation of any game means will be created and the counterfeit equipments will be eliminated from the market, as well as those situations when equipments or series being operated in different locations are doubled, based on a single license. However, I express my concern about the deadline by which all devices must be connected. The development of the information systems for the connection means a consumption of IT resources, and in the absence of clear regulations,
there is the possibility that some operators might not be able to meet the deadline stipulated by the law.
Valentina Dobre, Vice-president of ROMSLOT and Managing Director of Merkur Entertainment:
The connecting of the devices to the centralized informatics system at the ONJN is one of the regulation propositions for improving the control on the slot machines gambling market and preventing the illegal exploitation of game means that our association sent to the
National Gambling Office. Although this is a good measure, the deadline for the connection to the centralized computer system of December 31st 2015 doesn’t seem to be a realistic one for many operators, considering the discussions in the market. All these
problems come from the fact that as we are talking we don’t yet exactly know the conditions an operator should meet and other details concerning the connection. Thus, we consider that a transitory stage is necessary in order to achieve the connection under optimal conditions, as choosing a supplier means meetings, testing, negotiating the offer, and then there are the logistic aspects which also take time.
What are the biggest problems raised by the industry regulating aspects?
Adrian Ciura, ROMSLOT member and General Director of Revital:
Any major change, regardless of the industry, brings along challenges. In this case, the challenges were given by publishing
the norms late. The operators are in a situation where they don’t know what to do, because, although the legislation is in force, the implementation norms are missing.
Jozsef Kalman, ROMSLOT member and General Director of Elmat:
Delaying the publishing of the norms caused confusion on the market. One of the most important measures about which the operators want to know how it should be applied is the interconnecting of the devices. We are worried about the deadline for this, not knowing the procedure or the technical details.
Viorel Cosma, ROMSLOT member and Co-Partner at Lucky Seven Gambling:
Another issue raised by the new legislation, from our point of view, is given by the increase of taxes for the operation, licensing and the vice tax.
Mircea Corbu, ROMSLOT member and Co-Partner at Plaicomixt:
I would also mention the taking out of the classic slot machines from the bars.
At the same time, we don’t know how the B class slot machines are defined in the norms and what their technical limitations are.
What do you think about the development of the online gambling
industry in Romania as compared to the land based industry?
Valentina Dobre, Vice-president of ROMSLOT and Managing Director of Merkur Entertainment:
Although so far there haven’t been licensed operators in this field, the online gambling is not something new for Romania, as it also existed in the past, but without a legal basis. We are not talking
therefore about a new competitor for the land-based operators. However, bringing the online businesses into legality offers new possibilities and, for sure, the market will grow. From the player’s point of view, the introduction of the legislative measures concerning the online market means a higher level of protection and certainty that he is playing in a sure and legal environment,
being thus able to address the authorities if he considers that he is
facing a problem.
Jozsef Kalman, ROMSLOT member and General Director of Elmat:
The development of the online gambling is a natural thing in a society spending more and more time on the internet.
Thus, on the long term, we will feel the influence of the online in land-based as well, it will surely make its presence known. However, the advantages the land-base has to offer will determine the players to have a hard time giving up the pleasure of going into a game hall.
Viorel Cosma, ROMSLOT member and Co-Partner at Lucky Seven
Gambling:
Under the conditions of the new legislation, the online gambling will be as strictly regulated as the land-based industry and we believe
that there are perspectives for development.
However, they are not a threat to the land-based industry, because
the players will always prefer the services and comfort of a game hall, but also the satisfaction of having the prize “in hand”.
What do you think about the fact that the new legislation talks about responsible gambling for the first time?
Gherghina Ionescu, Secretar ROMSLOT and Administrator Max Bet:
Our association supports the initiatives coming to support players who crossed over the entertainment line.
We are the initiators of the responsible gambling concept in Romania and have always militated for the problem of making both operators and players more responsible about this. It is important that this industry understands that such actions are necessary and that responsible gambling is a common theme. ROMSLOT, together with the most representative association in the field of bookmaking, Romanian
Bookmakers, is carrying out the “Responsible Gambling” program,
which is the clear evidence of the fact that there can be unity in this industry when you are governed by the same principles.
How do you comment the delicate situation in the last period concerning the tax agents’ interpretation of the income and revenues obtained from gambling?
Karoly Buzas, member of the Board of Directors of ROMSLOT and member in the executive committee, EUROMAT, General Manager at GameWorld:
The situation lately is found in the field of bookmaking, but it affects the entire industry. The action will have a negative impact on the slot market in Romania as well, considering the fact that the bookmaking agencies generate 16% of the gross income of the slot-machine type games industry. We stand by our partners at Romanian
Bookmakers and support the actions they initiated. The problem comes from the fact that the tax control authorities don’t consider the gambling specific legislation, where it is stipulated that the income of the operators id the difference from the total of intakes or incomes (in) and the total of payments as earned prizes (total out), including the jackpots, meaning the Gross Gaming Revenue.
In this case we requested an opinion from the European association of gambling EUROMAT, where ROMSLOT is also part of, and the answer, formulated after a review at the member states level confirmed our position.
The principle behind the interpretation of operators of gambling revenue is the same in most jurisdictions: it is defined as Gross Gaming Revenue. Moreover, following the initiative ROMSLOT information on the current situation in our country, EUROMAT addressed the authorities of Romania, the Ministry of Finance and the ONJN an open letter expressing their concern about the misinterpretation of operators’ revenue by the tax authorities, providing an analysis at European level and calling for solving
the problem. Euromat informed the Romanian authorities that the case could set a dangerous precedent for the gaming industry and required that all European governments encourage the development of a healthy and well-regulated industry. A correct and consistent application of the tax legislation is essential and the most effective way to
ensure player protection and to combat the black market.
Mircea Corbu, ROMSLOT member and Co-Partner at Plaicomixt:
The revenue obtained from gambling can only be seen as the difference between IN and OUT. For example, in the case of slot machines, the money going in the machine, even if it was registered in the device accounting system, are the player’s property, as he may request the money back at any time without issuing a document for this purpose and without the money being prize. The money can be considered as belonging to the organizer only after the player has left, thus ending his game. As long as the player can decide how he wants the money, even if that amount was inserted into the machine, we cannot consider that that money is in, meaning a revenue for the organizing company.
How the slot machines industry in 2015 in Romania is seen by the newest ROMSLOT members and what their expectations are for 2016: Viorel Cosma, ROMSLOT member and Co-Partner at Lucky Seven Gambling: The legislative changes at the end of 2014 have a positive impact in the activity of our society, considering that provisions were introduced helping to eliminate from the gambling market those companies operating without respecting the legislation in force. As far as 2016 is concerned, we wish for it to bring stability and a sustainable development of this industry.
Mircea Corbu, ROMSLOT member and Co-Partner at Plaicomixt: It is hard to summarize this year’s slot industry in just a few words. This was a time characterized by major changes, which I believe caused uncertainty and imposed a rethinking of our businesses. For instance, we reduced the slots and employees numbers, but we might increase the machine numbers after the issuing of the norms. I hope 2016 will be characterized by stability and transparency.
ROMSLOT represented the slot machines industry in Romania at the EASTERN EUROPEAN GAMING SUMMIT
ROMSLOT was one of the representatives if the gambling industry in Romania at one of the most prestigious gambling forum in Eastern Europe, EASTERN EUROPEAN GAMING SUMMIT, which was held in Sofia during November 23rd-24th. Valentina Dobre, Vice-president of ROMSLOT spoke at two of the most important sessions of the event: Responsible Gambling and Thinking East. More than 30 experts in gambling from the entire world (just to mention a few countries Macau, Germany, Great Britain, Portugal, Malta, the Netherlands, Croatia etc.) took part in this year’s edition, among them we can mention Mr. Helmut Kafka – Vice-president of EUROMAT, who was in Romania in 2013 invited by ROSMLOT and Mr. Pieter Remmers – CEO of EASG and one of the best known experts in responsible gambling at global level.
