„SUCCESSES” OF PAST LEGISLATIVE CHANGES AND NEW INITIATIVES THAT WILL IMPACT THE INDUSTRY 3d163z
The last couple of years have been a difficult test for the gambling industry in our country. As if out of nowhere, the war of the political class against gambling, led by the highest rulers themselves, „managed” to destabilize a well-regulated market and to send the gambling exploitation activity into the derision. 2o3g1z
► by Lawyer Prof. Marius PANTEA, PhD 6p6y63
by Lawyer Prof. Marius PANTEA, PhD 5h423z
It seems that the two years of chaos were not enough, after a short (election) break now the offensive against this type of business is resumed with proposals meant to effectively close the field. We are talking here about the last of them, which aims to close all specialized premises operating on the ground floor of blocks of flats, for which the ONJN has already issued a negative opinion, not agreeing with this proposal, but at the express request, this opinion must be amended, so that the authority, which knows best the real situation of national gambling, effectively allows the closure of the market (the measure affects more than 80% of the places where gambling is operated). This time too, under the pretext of combating gambling addiction, without consulting the industry’s Business Advisory Council and without estimating the budgetary impact of the measures, a decision will probably be taken which will certainly have a devastating impact on the traditional gambling business in our country.
The proposal does not take into the fact that most of the premises (own or belonging to partners) where the Romanian Lottery operates are located on the ground floor of blocks of flats, that with the closure of the specialized locations of private licensed operators, significant amounts of money will be lost from the tax on rents, that there will be staff redundancies that will generate another hole in the state budget (taxes on salaries, contributions, etc. and there will be unemployment expenses), that sums that are paid by organizers on a monthly and yearly basis (license fee, authorization fees and so on) will disappear and so on.
Just in of numbers, we briefly present the impact of the reckless legislative measures taken in the last two years by those who neither have the competence nor realize the harm done, respectively:
1. State budget revenues fell by €140 million (direct taxes alone);
2. In the year 2024 alone, 33,356 slot machines were taken out of service (as a result of increased fees and warranty and of the implementation of the latest legislative changes), for which the monthly license fee (out of the €5,300/year) and the €500/year vice fee were paid;
3. 264 licensed companies (of which 158 first class licenses and 106 second class licenses) ceased their activity;
4. 1,263 specialized locations had been closed;
A quick glance at the national budget data shows that the measures taken have had a significant negative impact on revenues and the proposed legislative measure will considerably increase the hole in the budget, in the sense in which we summarize:
For the newly approved 2025 budget, an increase of 8.39% in taxes to be collected from gambling is foreseen, but for sure if the proposal will be approved, these increases will turn out to be a huge hole in the budget.
Analyzing the legislative measures implemented recently, the results show the following:
Limited-risk gambling, where players could bet small amounts and win no more than 1,000 lei, was abolished. Why? It is difficult to understand the justification for this measure, the limited-risk slot machines were introduced in about 2014, following the model of Western countries and were those that did not allow the development of gambling addiction. The small amounts that one could win, through the effect of the law, made these machines leisure and entertainment equipment, the player not being attracted by the possibility of a large financial win. Now this very equipment have been eliminated from the market.
The operation of slot machines has been banned in localities with less than 15,000 inhabitants. The result has been the migration of operators and players to large cities, overcrowding of specialized venues in cities that meet the criteria. Also, as a result of erroneous legislation (prohibiting licensing, not operation of the gaming devices) and the application of these rules by ear, the courts have allowed those who challenged the measures taken by the Office Supervisory Committee to operate in the localities in question. After the application of this measure, which was wrong in our opinion, they noticed that more specialized locations had appeared in localities with more than 15,000 inhabitants, and initiated the last mentioned legislative proposal.
Alcohol consumption has been banned in gambling premises, with the result that gamblers go out in front of the halls for a cigarette and a glass of beer (or something else brought from home) and spill their tempers, creating a nuisance for ers-by and nearby residents.
The creation of a national database of self-excluded persons was made compulsory, which does not exist at this very moment either, because the ONJN did not have the funds for it or failed to produce a specification for the purchase. This provision has created a real hysteria among players, who, after self-excluding from an operator or submitting their request directly to the Office, manage to another operator, where they play and if they lose money, they ask for their money back on the grounds of self-exclusion. The fact that the legislative provision is unclear and incomplete, that the rules establishing a minimum set of criteria have not been issued (the period of self-exclusion, its modification, personal data, etc.), has allowed the appearance on social networks of promises of recovery of sums from the state (from ONJN or the Romanian Lottery, as the case may be) or from licensed operators (both land based and online), in which various law firms, for a fee, promise to recover the lost sums, thus creating false hopes for people who have addiction or material problems.
The fact that certain articles have been partially amended, new provisions have been added (some by Emergency Ordinance, others by the approving Law), without observing the rules of legislative technique, have brought the normative acts regulating the field in an unprecedented situation, because there are provisions that either cannot be applied or contradict the new amendments, and the implementing rules (provided in the Government Decisions or in various Orders that should have been issued), either have not appeared until now or were issued with great delay or are ambiguous. Add to all this, the new interpretations of the Controllers within ONJN, who for more than 10 years applied the provisions one way, and recently have a different approach, applying the same (unchanged) provisions in another way, which creates additional stress in a market that is struggling to cope with the avalanche of senseless changes.
On top of all this, the Court of s of Romania recently finalized an audit of the ONJN, which revealed several shortcomings, increasing the pressure on the Office’s employees and, implicitly, on the market. For those who are familiar with gambling and have had the opportunity to go through the control document, the conclusion is: in recent years, some of those who headed the ONJN had nothing to look for in those positions. Not just those indicated in the report forgot to issue the President’s Orders required by the legal norms (with clear deadlines), or to publish them in the Official Gazette of Romania. The inspectors only pointed to a specific person, the other similar situations are not even mentioned in the report, which denotes a targeted and unprofessional inspection, in our opinion. On the other hand, it seems that those who carried out the control, do not understand the niche field of gambling nor the legal provisions, because they managed, through advanced mathematics, only known by them to obtain some so-called damages, which are not really related to the law and are not substantiated. We haven’t seen much action on the huge sums of money collected by the Office for the Prevention of Addiction, and not spent since this legal provision was put in place. Here just something about the four employees who for years only received their salary and nothing was done to prevent addiction, which allowed the nationalization of the sums and their transfer to the state budget. Oh, sorry, two posters were made whose message is completely at odds with the gambling policy of the civilized world.
The gloomy picture presented is no exception to the situation in which our country’s institutions are today, and to the past or present daily challenges (pandemics, border war, complicated economic situation, social upheavals, etc.), we can add the gross incompetence of some of those who lead us or who manage various areas. Would the new US istration order the closure of American businesses (in our case the casinos in Las Vegas), as in our country it seems that the traditional gambling industry needs to be abolished, without taking into the significant budgetary impact, instead of taking measures to prevent addiction and integrate gambling into the entertainment industry, as it is in the entire civilized world. Do the failed attempts at regulation not raise questions for those who lead us, does the precarious budgetary situation allow for further mistakes in this area. We believe that the time has come to also listen to industry professionals, who have relevant proposals that are also applied by other industries in our country or in civilized countries. The radicalization of voters, most of whom are also gamblers, is the result of bad political decisions, inconsistency and cheap populism promoted by some political leaders.
We continue to the correlative rights and obligations of both players and operators, the legislative interventions that reduce addiction and allow gambling – an entertainment activity, and the introduction of programs to empower and educate the consumer of gambling services. We believe that the annual changing of the operating rules, increasing fees and other measures that prevent predictability in this area, only transfer money from the regulated market to the black and gray market (increasing tax evasion), making the existing situation even more difficult and causing damage to the state, players and licensed operators. We can compare the gambling industry in our country with other industries, for example the pharmaceutical industry, there was no order to close pharmacies (which far exceed the number per capita), restrictions were introduced on the release of medicines (antibiotics and others), with the aim of educating the population. The same solution has been adopted in the tobacco industry (putting messages on cigarette packets), banning advertising, respectively. In the gambling market, measures can be adopted to educate players, limit excessive advertising to prevent and combat addiction.
To summarize, we would like to emphasize that artificially restricting this market will have only one result – migration to the black market, and the losses will be significant for society (addiction will not be limited – on the contrary, it will get out of control), for the state budget (much smaller amounts will be collected) and for the licensed operators (unfair competition will dominate this market). We believe that it is particularly important to urgently implement measures aimed at self-exclusion, software and database creation, initiation and adoption of clarifying rules and necessary legislative changes and, most important, use the huge sums of money available to the ONJN for the prevention and combating gambling addiction.
