Romania is the 12th largest country of the European Union with a total area of 238,397 square kilometers. Located at the crossroads of Central, Eastern, and Southeastern Europe, it borders the Black Sea to the southeast, Bulgaria to the south, Ukraine to the north, Hungary to the west, Serbia to the southwest, and Moldova to the east.
According to the World Bank, Romania is a high-income country with a mixed economy. Romania is a net exporter of electrical energy and 48th worldwide in terms of the consumption of electric energy.
According to Bloomberg, in 2013 Romania ranked 5th in the world, and according to The Independent, it ranks number one in Europe at Internet speeds, with Timișoara ranked among the highest in the world. Tourism is a significant contributor to the Romanian economy, generating around 5% of GDP. In 2014, Romania had 32,500 companies that were active in the hotel and restaurant industry, with a total turnover of EUR 2.6 billion. The number of tourists has been steadily rising, reaching 9.33 million foreign tourists in 2016, according to the Worldbank.
Since 2000, Romania has attracted increasing amounts of foreign investments, becoming the single largest investment destination in Southeastern and Central Europe. The online gaming industry is very well regulated and in line with legislative models in the EU, but with better taxation and many extra advantages. The Romanian gambling market is a rapidly growing enterprise, emerging as an attractive European destination for prominent international operators.
In Romania, the Authority responsible for regulating the gambling industry is the ONJN (Oficiul Național pentru Jocuri de Noroc). On the 24th of February 2016, Romania’s Government has finalized and adopted detailed technical and operational regulations for the gambling industry regarding both online and land-based companies. A Supervisory Committee within the ONJN is assessing the applications and granting the particular licenses/authorizations required by the law.
The Romanian legislation which impacts upon gambling activities comprises the following main normative acts:
- Government Emergency Ordinance no. 77/2009 on the organization and operation of games of chance (“GEO no. 77/2009”);
- Government Decision no. 111/2016 for the approval of the Methodological Norms for implementation of GEO no. 77/2009 (the “Secondary Legislation”);
- Government Emergency Ordinance no. 20/2013 on the organization and functioning of the National Gambling Office and for the modification and supplementation of GEO no. 77/2009;
- Government Decision no. 298/2013 on the organization and functioning of the National Gambling Office;
- Law no. 227/2015 regarding the Fiscal Code (“Romanian Fiscal Code”);
- Law no. 207/2015 on the Fiscal Procedure Code;
- Order issued by the President of the National Gambling Office no. 47/2016 for the approval of content, reports, and access to information transmitted by remote gambling operators to the National Gambling Office;
- Order issued by the President of the National Gambling Office no. 48/2016 for the approval of the procedure for fulfilling the conditions for connecting land-based slot machines and betting-type games of chance; and
- Order issued by the President of the National Gambling Office no. 93/2016 for the approval of the mandatory requirements for certification and audit of the remote gambling systems.
As a matter of principle, the Romanian regulation permits the offering of any of the Relevant Products on the Romanian market, both in land-based and digital/online forms, provided that the necessary licenses and authorization (s) are obtained by the operator intending to offer the respective Relevant Product.
The social/skill games are not expressly regulated under the Romanian gambling legislation and should not normally be qualified as games of chance. Thus, in accordance with GEO no. 77/2009, a game of chance is defined as a product which cumulatively meets the following characteristics:
- the charging of a participation fee;
- the game is based on the random selection of results;
- monetary winnings; and
- public offering of the respective game by the organizer to the participants.
Therefore, any game that lacks one (or several) of the mandatory elements provided by the legal definition should not be qualified as a game of chance and, in principle, should not be permitted in Romania without obtaining the licenses and authorization(s) imposed by the gambling regulation.
A license must be obtained from the ONJN by all operators wishing to organize gambling activities in Romania. After the Committee has successfully evaluated the applicant’s file, a license may be granted individually for a period of 10 years. This excludes the temporary games in which case the license is granted for a limited period of 3 months. Additionally, an authorization must be obtained from the ONJN. The fees related both to the licenses and the authorization are listed below.
The requirements imposed by the ONJN include:
- Residence in Romania. Operators wishing to offer their services to Romanian gamblers must be residents of Romania, EU or EEA and they must obtain the relevant licenses and authorizations from the ONJN. In case the company is a foreign entity, it must appoint a local authorized representative, whose domicile is in Romania, to deal with the competent authorities in the country and have the power to conclude contracts on its behalf
- Opening of a bank account with one of the banks in Romania where the operator would need to deposit the players’ money. Licensed remote gaming operators will only be allowed to make payments to players through the payment processors that have been approved by the ONJN
- Requirements regarding the minimum share capital of the company depending on the type of game it offers
- A monthly declaration giving details regarding income from games of change as well as the fees due will have to be submitted to the ONJN on a standard form
- Compliance with the principles regarding the protection of minors as well as with the content of the promotional material used and the locations where they can be displayed
In accordance with GEO no. 77/2009, all payments to players participating in online gambling must be made only through a payment processor which holds a Class 2 licence granted by the National Gambling Office, irrespective of whether the respective payment entity already holds the necessary authorisations/approvals in accordance with the banking/financial regulation.
On July 18, Law no. 129/2019 was published in the Romanian Official Gazette, which transposes the Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (“AML Law”), which, by comparison to the old Romanian AML Law, extends the sphere of reporting entities in the gambling field (in the sense that the old AML law specifically referred only to casinos as being subject to the AML requirements, while the new AML Law applies to all gambling operators). Under the new AML Law, it is the National Gambling Office which is the controlling authority with respect to the prevention of money laundering in the gambling field. While the Romanian AML Office may still carry out inspections, it is expected to do so only under exceptional circumstances, leaving this attribution mainly to the National Gambling Office.
So far, the interpretation of the Romanian AML Office was that only Romanian-based operators were subject to the local AML Law (as such implements the EU Directive), while foreign (non-resident) entities would fall under the AML regulations existing in their country of origin. However, it is worth noting that, based on a recent quasi-official interpretation of the Romanian AML Office during a public conference, it now seems that the Romanian AML Office is of the opinion that the new AML Law is also applicable to foreign entities, which implicitly generates additional legal obligations to such operators. As such, despite being incorporated and having their fiscal residence in other jurisdictions, the foreign-licensed online gambling operators active in Romania and carrying out remote gambling activities on the Romanian territory, in virtue of a Class 1 licence and authorisation issued by the National Gambling Office, are obliged to perform the relevant AML reporting in Romania, and appoint a contact to liaise with the local AML authority.
While the Romanian gambling legislation does not specifically regulate the use of virtual currencies for gambling operations, GEO no. 77/2009 expressly provides that any payment instrument used for gambling must comprise the identification details of the individual who operated the respective instrument. This regulatory requirement may lead to the conclusion that virtual currencies that cannot enable this identification standard are not permitted under the Romanian gambling regulation.
Anticipated Law Reforms
The following regulatory initiatives, if enacted, may have a rather significant impact on the Romanian gambling market:
- Legislative proposal for amending and supplementing the Government Emergency Ordinance no. 77/2009 on the organisation and operation of games of chance – the legislative proposal is at this moment in debate at the Senate and the first draft of the proposal can be found on the Senate’s website: https://www.senat.ro/legis/PDF/2019/19L397FG.PDF. The draft of the legislative proposal includes, among others, a series of restrictions on advertising (for example, it provides that gambling advertising spots are prohibited during the day, and their broadcasting is permitted to only start at 23:00 hours; out-of-home gambling advertising of large dimensions is also prohibited), as well as a social gambling responsibility from the part of operators (for instance, land-based operators will be obliged to visibly display to clients posters and informative messages with respect to the risk of developing a gambling addiction in each room of each gambling agency; also, online gambling operators will be obliged to display an informative virtual banner on the gambling platform). The new legislative draft also provides that the documents by which the licence and authorisation of a gambling operator are revoked, suspended or cancelled will immediately be sent to the National Trade Registry Office.
- Draft Technical Order “Minimum technical conditions for the verification of the gambling means” to be issued by the President of the National Gambling Office, which has as its purposes, among others, establishing a set of minimum technical requirements for the gambling equipment that covers the security, smooth functioning, and integrity of the software and hardware, as well as establishing a set of criteria that will allow the Romanian Legal Metrology Bureau and conformity assessment bodies to evaluate the conformity of slot machines in a way that is unitary, traceable and that allows for an audit of the manner in which the evaluation was performed to be made. The draft Technical Order was published on the official website of the National Gambling Office on 14 June 2019 and is currently pending.
- According to AML Law no. 129/2019, the National Office for Preventing and Combating Money Laundering (“ONPCSB”) shall issue an order, within 90 days from the date of entry into force of the AML Law, containing the methodology and the models of the reporting forms. Until the entry into force of the above-mentioned order, the reporting entities will send the reports according to ONPCSB Decision no. 2742 and based on ONPCSB Decision no. 673/2008. At this moment, the draft of the new order has not yet been published.
Also, according to a recent interview of the current President of the National Gambling Office, published on the website www. bursa.ro on 3 September 2019, the President represented that the gambling regulatory authority considers the issuance in the near future of new legal regulations for betting terminals, the establishment of verification norms for the collection mode, the security of the transmission and, respectively, the storage of the data related to slot-machines, as well as other legal changes to regulate new types of gambling activities (such as daily fantasy sports (“DFS”) activities and others).
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