Summary:

1. Government Ordinance No. 15/2022 amending and supplementing Government Emergency Ordinance No. 77/2009 on the organisation and operation of gambling activities

2. Government Ordinance No. 16/2022 amending and supplementing Law No. 227/2015 on the Fiscal Code and repealing certain normative acts and other fiscal-financial measures

Government Ordinance No. 15/2022 (“GO No. 15/2022”) amending and supplementing Government Emergency Ordinance No. 77/2009 on the organisation and operation of gambling activities (“GEO No. 77/2009”) has entered into force on 18 July 2022, save for a provision regarding the administrative offences which shall be effective starting with 14 August 2022.

The GO No. 15/2022 has a significant impact on the gambling industry, as it regulates stricter rules for existing and new players in the industry, mainly by increasing the applicable gambling fees and imposing new obligations related to advertising of gambling activities.

Also, pursuant to GO No. 16/2022 amending and supplementing Law No. 227/2015 on the Fiscal Code and repealing certain normative acts and other fiscal-financial measures (“GO No. 16/2022”), the Romanian Government has increased the level of taxation of the players’ income from gambling activities.

A.        New rules on off-premises and TV gambling advertising

The GO No. 15/2022 has introduced a special advertising tax on and reporting of the agreements for the promotion of gambling brands, platforms, applications, or activities which are licensed in Romania by way of placing advertising messages in urban or rural areas and on public roads or by means of TV services.

These new requirements apply to:

• Gambling organisers – when the advertising agreements are concluded directly between the gambling organiser and the provider of the advertising services; or
• Provider of advertising services – when the advertising agreements are concluded by a non-licensed entity (e.g. an agency acting on behalf of the gambling operator) and the provider of the advertising services.

However, these new requirements do not apply to the advertising of gambling activities carried out by sports entities or federations in stadiums or sports halls.

A.1.    Special advertising tax

The advertising tax amounts to 5% of the value of the fees paid under the advertising agreements.

The gambling operators or the providers of the advertising services (as applicable) must declare to the fiscal authorities the advertising fee through a special tax return, the content and model of which is to be approved by order of the President of the National Agency for Fiscal Administration within 30 days from the date of entry into force of GO No. 15/2022.

Various deadlines apply to the payment of the special advertising fee, namely:

• The tax is due by the 25^th of the month following the month in which the advertising agreement was concluded;
• In case of agreements which provide periodical payments to the advertiser, the tax is due on the last day of the month in which the periodic payment is due under the agreement; or
• For ongoing adverting agreements, the tax is due in 30 days from the date of entry into force of the order of the President of the National Agency for Fiscal Administration approving the content and model of the fiscal returns.

We note a few deficiencies of the GO No. 15/2022 with respect to the newly introduced tax which may generate difficulties in practice, namely:

• The law fails to address the scenario of the agreements where the fee is not actually paid to the advertiser, or any fees are reimbursed to the payer in case of default of the services provider (e.g. in case the advertiser fails to perform the advertising services, the agreement is subsequently rescinded for advertisers default);
• The law states that, in case of ongoing agreements, the tax shall be due in 30 days from the date of entry into force of the order of the President of the National Agency for Fiscal Administration approving the content and model of the fiscal returns, without considering that such ongoing agreements may also provide for periodical payments. Therefore, it seems that the law has introduced a less favourable regime for ongoing contracts.

A.2.    Reporting of advertising agreements

The gambling operators or the advertising services providers (as applicable) must notify the National Gambling Office:

• Any agreements for the promotion of gambling brands, platforms, applications, or activities by way of placing advertising messages in towns and on public roads or by means of a television service, save for the agreements concluded by gambling operators with sports entities or federations for promotion of their products in stadiums or sports halls;
• Any agreements amending the value of the above-mentioned agreements.

The notification must be submitted in 5 (five) working days as of their execution.

B.        INCREASE OF GAMBLING LICENSING/AUTHORISATION AND ADMINISTRATIVE FEES

B.1.    Licensing fees

The licensing fees for both (i) gambling organisers holding a 1^st class gambling license, and (ii) service suppliers holding a 2^nd class gambling license, have been increased.

The updated licensing fees are as follows:

• For organisers of online gambling, the licensing fee shall be as follows:

• For organisers of traditional gambling, the licensing fees are as follows:

1. lottery games: EUR 135,000;
2. mutual betting: EUR 54,000;
3. fixed-odds betting: EUR 100,000;
4. counterpart betting: EUR 100,000;
5. games of chance specific to casinos: EUR 115,000;
6. games of chance specific to poker club: EUR 17,500;
7. slot-machine type games: EUR 75,000;
8. bingo games performed in gaming halls: EUR 11,500;
9. bingo games of chance organised via television network systems: EUR 90,000;
10. poker festival: EUR 10,000;
11. temporary casino-type games: EUR 25,000;
12. temporary slot machine-type games: EUR 6,500;
13. temporary bingo-type games: EUR 3,000;
14. sweepstake-type games: EUR 15,000;
15. video lottery games: EUR 60,000.

• For service suppliers holding a 2^nd class gambling license the license fee is of EUR 9,500.

B.2.    Authorisation fees

The authorisation fees owed by gambling organisers both traditional and remote were amended. Among others, we note the following changes:

• The authorisation fee for organisers of online gambling is of 23% of the operator’s gross gaming revenue (GGR), but not less than EUR 120.000 / year;
• The authorisation fees for organisers of traditional gambling:

1. lottery games: EUR 200,000;
2. mutual betting: 21% of the operator’s GGR but no less than EUR 100,000;
3. fixed-odds betting: 18% of the operator’s GGR but no less than EUR 100,000;
4. counterpart betting: 21% of the operator’s GGR but no less than EUR 100,000.

B.3.    Administrative fees

Gambling organisers must pay several administrative fees:

• Fee for the analysis of the license application for organisers of online gambling – EUR 3,000;
• For the analysis of the license application for organisers of traditional gambling – EUR 500;
• Fee for the issuance of the gambling license – EUR 9,500 / licence;*

Note: this tax is applicable also to the holders of the 2^nd class gambling licenses (e.g. gambling software developers and providers, hosting services providers, affiliates etc.).

• Fee for the analysis of the authorisation application – EUR 150;
• Fee for the analysis of the application for integration of new games / certification of games on the platform used by the online gambling organisers – EUR 150.

C.        Extended scope of “blacklist”

Pursuant to the previous regulation, the websites of the entities who conducted online gambling activities on the Romanian territory without paying the relevant gambling license / authorisation fees were included on the “blacklist” kept and updated by the National Gambling Office. Such entities are not allowed to obtain gambling licenses and authorisations.

The GO No. 15/2022 expands the scope “blacklisted” entities. As such, the National Gambling Office may include on the blacklist not only the websites/platforms/gambling apps of the unlicensed gambling organisers, but also:

• The brands, trademarks, logos of entities who exploit or exploited online gambling activities on the Romanian territory without paying the relevant gambling license / authorisation fees or other amounts owed to the State Budget; and
• The websites, platforms, brands, trademarks, logos and gambling applications which promote unauthorised gambling activities in Romania.

D.       New deadlines for the payment of the responsible game contributions

The GO No. 15/2022 provides updated due dates for the payment of the responsible game contribution, namely:

• For the first year of the license, within 10 days of the date of approval of the documentation;
• For the subsequent years, by the 25^th of January.

If the validity of the license ceases for any reason, the annual responsible game contribution owed for the respective year shall be paid in full.

E.        Gambling reporting

Pursuant to the former legislation, gambling organisers had the obligation to notify all changes related to the information provided to the National Gambling Office taken into account upon the issuance of the licenses. By GO No. 15/2022 this requirement was adjusted in the sense that the notification obligation shall apply only with respect to the significant amendments of the information communicated to the regulator in the context of the licensing file. Such notification must be submitted in 5 (five) working days after the occurring change. The law also now clarifies that this reporting requirement also applies to holders of 2^nd class licenses.

The list of significant changes is supposed to be approved by the order of the President of the National Gambling Office in 30 days from the date of entry into force of GO No. 15/2022. Therefore, the applicable reporting requirements will be clearer once this secondary piece of legislation is enacted.

F.        Adjusted sanctioning regime

The GO No. 15/2022 clarifies that the cancellation of the license in case National Gambling Office discovers that false / inaccurate information was provided within the licensing application file (which, had it been known, the regulator would not have issued the license) applies also to holders of 2^nd class licenses and not only to gambling operators. Also, the law now states that the cancelation shall occur automatically, the National Gambling Office does not have anymore the power to assess whether to cancel the licenses/authorisations in such cases.

Also, the violation of the following obligations set forth by the GEO No. 77/2009 is now sanctioned with administrative fines from RON 20,000 to RON 40,000:

• The obligation to secure to the players participation in the game with equal chances, for equal stakes, played on random elements or otherwise or, in the case of bets, on elements of hazard and players’ ability;
• The obligation to conduct gambling activities only with staff used on contractual basis and keep unitary record of the activity conducted, irrespective of the number of locations in which activity is performed;
• The obligation to not use the name „cazinou” (in Romanian) / “casino” or derivates therefrom, save for the gambling organisers that operate this type of activity and only for the locations authorised to this effect;
• The obligation to produce evidence of lawfully owning or using the gaming means and related facilities (including software);
• The obligation of the betting organisers to conduct the operation of the activities for which they were authorised via automatic data processing programs, unique at the level of the organising company, irrespective of the number of locations in which said activity is conducted, subject to the obligation of centralising in a central electronic system located on the territory of Romania the information revealing all participation fees collected and all prizes awarded.

G.       Increased Taxation of players’ income from gambling

According to GO No. 16/2022, starting with 1^st of August 2022 the taxation of the revenue from gambling activities obtained by players shall be as follows:

The tax due shall be determined on each payment by applying the above-mentioned thresholds of taxation to each gross income received by a participant from an organiser or payer of gambling income.

Horia Ispas, Partener ȚUCA ZBÂRCEA & ASOCIAȚII
Sergiu Crețu, Managing Associate ȚUCA ZBÂRCEA & ASOCIAȚII