Countries that have legalized online gambling are faced with numerous challenges when it comes to the regulation of the online gambling industry.
In November 2013, the European Union (EU) issued infringement proceedings against Romania for not having proper control over its online gambling industry. The EU raised questions about the compliance of Romania’s gambling regulation and the foundational principles of the right to freedom of services which comes under Article 56 of the Treaty on the Functioning of the European Union.
Romania has taken those infringements seriously and has put together a proposal that will look to amend its gambling regulations. These amendments will be made to the Government Emergency Ordinance No 77/2009 and will address issues such as taxes remitted by gambling operators, payment methods used by online gambling websites, taxes imposed on tournament winners and management and operation of all games of chance.
The new amendments proposed by Romania will see the issuance of three types of licenses. The Class 1 license will be available to gambling companies who offer remote games of chance directly to consumers. Class 2 licenses will be required by all legal persons that undertake remote or traditional gambling. These include the likes of software providers, affiliates, and testing houses. The Class 3 licenses will be applicable to companies that run lottery games and will continue to run as the National Lottery.
The cost of a Class 1 license is based on the annual turnover of the company and the minimum fee is €6,000 for companies that have a turnover that is less than €500,000 per annum. Operators who make over €10,000,001 per annum will be required to pay more, up to a maximum of €120,000. The Class 2 license will be made available for €6,000 per annum.
The new amendments will also impose a new range of taxes on online gambling companies and players. Online gambling companies in Romania will have to buy a license and also pay an annual authorization fee of 16% of gross gaming revenue. However, online players are exempted from paying any taxes as the amendment states “Incomes derived from remote (online) games of chance and slot machines and received by natural persons are not taxable at source.”
Renee is an international analyst and journalist specializing in covering legal developments and legislative efforts in regulated online betting markets world wide.