An overview of the latest happenings across Eastern European online gambling markets would certainly be centered mainly around Romania. The country’s gambling industry landscape has changed drastically over the past two years, particularly from a regulatory point of view.
Urged by the European Commission and probably by the growing demand for diverse Internet gaming and sports betting options, Romanian legislators introduced late in 2014 an overhauled gambling law, which was, to a major extent, concerned namely with the provision of online gambling within the country’s borders. Although it was subjected to multiple modifications, the proposed regulation eventually came into force last year.
To describe Romania’s new gambling legislation as something unique and never seen before would be far from true. Regulators and lawmakers borrowed from here and there, followed the lead of Western European countries, altered and amended what would ultimately be adopted as its new gambling law until a satisfactory framework was created; satisfactory meaning one that was found agreeable for the needs of the market and by the European Commission’s standards.
Speaking of the European Commission, Romania has not been the only country to be scolded by European officials over the past several years in relation to the way gambling, particularly online gambling, is provided within their borders. With the European Union trying to implement a certain amount of ubiquity in member states’ policy-making processes, a number of other European countries (Scandinavian ones, for example) have also come under fire and have been urged to change their regulations in a manner that would comply with the EU treaties on free trade.
As mentioned above, Government Emergency Ordinance 92/2014, or Romania’s new gambling law, was introduced late in 2014. In fact, it was on December 30, 2014, when the legislation was published in the country’s Official Gazette. Based on regulations already introduced by other European Countries, the Romanian gambling law was said to have been intended to increase substantially tax revenue from gambling operations and to bring much-needed boost to the local tourism industry.
Among the many important provisions in the proposed legislation, the ones concerned with the provision of online gambling operations deserve to be paid a bit more special attention as due to these, the country has been making the headlines of gambling-related publications over the past several months.
With the introduction of the new law, Romania has become yet another European jurisdiction to regulate its Internet gaming and sports betting market so that to comply with the present demand and with requirements presented by EU lawmakers. Otherwise said, international operators and industry providers that were based anywhere within the European Union, Iceland, Norway, Liechtenstein, and Switzerland were given the green light to apply for local licenses.
Similarly to Spain, which liberalized its iGaming market in 2013, Romania, too, introduced a back tax for all international brands that expressed interest in operating there. The back tax required these operators to pay 20% on the revenue generated from Romanian players since 2009. In other words, they had to pay a certain compensation for offering their services in the country prior the market’s regulation.
Although many probably found it surprising, Romania’s liberalized iGaming market attracted quite a lot of interest. Some of the world’s best recognized online gaming and sports betting suppliers and operators applied for a local license, paying the above-mentioned back tax. According to figures posted earlier this year, this interest resulted in the country receiving €269 million in gambling taxes in 2015, up 71% year-on-year.
A significant number of those that had expressed interest in entering Romania’s iGaming market were awarded temporary licenses last year, while lawmakers and regulators from Oficiul National pentru Jocuri de Noroc have been trying to refine the country’s new law so as to provide a framework that would benefit involved parties in the best manner possible.
The creation of a proper taxation system came as an important part of the refinement process. Prior to adopting its latest gambling law, Romania taxed operators at 25% of the winnings generated. The beginning of the GEO 92/2014 era was marked by the introduction of a three-tier taxation system, which, too, was borrowed from Spain.
Under the new gambling regulation, operators will pay 1% on revenue of between €133 and €15,000, 16% on revenue of between €15,000 and €100,000, and 25% on revenue over €100,000. The three-tier system will be applied for the whole period of their licenses.
Here it is important to note that licenses will be valid for 10 years. Romania’s gambling regulator started granting permanent licenses to both international and domestic operators and suppliers earlier this year. Over the past several months, some of the world’s most widely recognized brands were allowed to officially enter the country and offer their products to local gambling customers. Big names like PokerStars and its sports betting brand BetStars, 888 Holdings NetEnt, Microgaming, and many more were among those welcomed by regulators to operate and supply operators.
Gambling is an unpredictable industry so giving an adequate enough prognosis how Romania’s regulated iGaming market would develop at such an early stage is close to impossible. However, there is serious interest in gambling activities among local customers, according to recent figures. Media was informed earlier this year that the amount of €1 billion was wagered last year and that more than one million Romanians are active bettors, with football and tennis being the most popular sports to be wagered on.
Given this big interest, the fact that a number of major operators and suppliers have entered and are to enter the market, and that the newly adopted law is based on regulations that have already proved to be somewhat effective in other European jurisdictions probably bodes well for Romania’s regulated online gambling market.
