Romania approves new gambling legislation, opens market to foreign operators
In May 2015 the Romanian government finally decided to make sweeping amendments to their existing gaming legislation, essentially opening their domestic market up to international operators. With a year’s hindsight it’s remarkable that such a move has taken so long to have become agreed upon, as the previously untapped tax potential that this move will generate is a significant boost to the state’s coffers. In part this change hasn’t just come about through logical government introspection, to a degree it was prompted by calls from the European Commission to standardize freedom of trade rules - including online casinos - across all of the territories that fall under it’s influence.
An Estimated Additional €100m In Tax Revenues
Before the new legislation was signed off, Romanian law required that all international casino operators who wished to apply for a license to operate within the country also have a legal registered presence in the country. Understandably few were willing to take up this offer simply because with online casinos there’s little need for more than one base of operations - as a website even with multiple, region specific forms - can stretch worldwide from a single HQ. Plus the majority of international casino sites prefer to operate from tax friendly territories, making the Romanian demands seem particularly excessive.
The situation was though that Romanians simply wanted to be able to gamble online with a standard of parity equivalent to that enjoyed by the majority of other EC citizens. It simply didn’t seem fair that they were unable to enjoy incentives online like free gambling machines, or on Romania’s “jocuri ca la aparate de noroc gratis”
Realizing that this wasn’t just a slightly crazy concept, but also that they were losing huge sums to illegal betting (more on which below) the government decided to relinquish this request and instead levy a triple tiered taxation system upon the online gambling market based upon received revenues. This worked out at:
- 1% tax upon revenue between €133 & €15 000
- 16% between €15 000 and €100 000
- 25% on any sum over €100 000
In a country that enjoys their recreational gambling and has a well developed internet infrastructure alongside a tech-savvy population, it’s thought that this will generate around €100m per annum in otherwise untapped tax revenues.
The New Licensing Rules In Romania
The recent changes have still implemented restrictions on which online gaming operators are eligible for a license to enable a legal presence within Romania. All those who receive a license are legally obliged to run their Romanian mirror site from within the country itself, and no casino company from within the EC, Switzerland, Norway,, Iceland or Liechtenstein is eligible to apply for permission to operate.
Demanding the mirror site being based within Romania is a particularly interesting feature of this story, as it has been implemented in order for the state authorities to keep a close eye on legitimate operators while also play a role in helping to detect and diminish the still very popular sites that continue to operate illegally and attract Romanian custom.
Ultimately the entire venture of rationalizing and organizing the Romanian gaming legislation has been carried out with a longer term plan. Effectively regulating the gaming markets - and online is a great place to start - will allow for the development of bricks and mortar casinos within prospective resorts that are being planned to give the tourist industry a major boost. All in all it’s good news for everyone though; the state earns more revenue, Romanian players have better options and enhanced protection, a new legitimate market has been opened up for operators, and in the long run it looks like the country will significantly benefit.