Parliament finally looks ready to do its job and legalize online casinos in Romania later this year. Here’s why that’s a good thing.
The arrival of the internet in Romania during the 1990s was quickly followed by a boom in internet gambling. Romanians love to gamble, and soon a large portion of the country’s population were placing wagers, playing blackjack and competing in poker tournaments, all online.
As the industry got bigger, policymakers grew increasingly concerned. Primarily because the “industry” was unregulated, untaxed and mostly operated from outside the country’s borders. Almost everyone agreed that Romanian gambling laws needed to be updated for the internet age.
After years of smoothing over the rough spots in proposed legislation, online gambling in Romania was legalized in December, 2010. Optimistic observers expected a wave of license applications, approvals and a brand new regulated, taxed, Romanian-operate internet casino industry.
Due to the government’s inexplicable inability to create a third part to review applications and regulate the industry, the 2010 bill still hasn’t gotten off the ground. Almost three years after “legalization,” Romania has not a single licensed, tax-paying internet casino or betting site.
But within this story of the gloom and doom, a bright ray of sunlight seems to be shining through. Good news has come from Parliament, and here are a few reasons to think that a solution to the malaise is just around the corner.
#1: Parliament is expected to make a decision soon
• Online casinos in Romania were first legalized in 2010
• The Parliament is expected to vote on a bill to issue licenses by the end of 2014
• The bill should improve regulation and allow the state to collect taxes
A new licensing and regulation proposal was introduced earlier this year, and while it still sites in Parliament, there is every indication it will be voted on before the end of the year.
National legislators have been stalling on a decision due to posturing in advance of elections coming this month, but rumors coming out of Bucharest are that a final decision is set to be made shortly after the election.
And while there are no money-back guarantees in politics, there is much more optimism than pessimism surrounding the bill. Most pundits and observers would be surprised if it didn’t pass.
While it may still take some time for the necessary administrative bodies to be created and for licensing applications to be reviewed, we can expect the first legal online casinos in Romania to launch sometime in 2015.
#2: Taxes to be slashed
One reason why foreign gaming service providers have been reluctant to formally enter the market (rather preferring to serve Romanian players from elsewhere) is the high tax rates, especially the state withholdings from casino revenues.
The latest proposal includes cutting existing tax rates, with the largest decrease being the cutting of the tax on online poker tournaments to .1%. The inability to decide on tax rates has quashed regulation efforts in the past, but this time lawmakers seem bent on getting it done.
#3: The public budget will get a boost
Opposition to lowering tax rates makes little sense, because currently the government collects no taxes from online gaming. If the bill is passed, the state budget will receive revenue from online casino games as diverse and blackjack, slots and bingo, online poker, internet betting, and lottery.
Even if rates are very low, the industry will produce hundreds of millions of dollars in revenue and provide funding for crucial public programs. It’s a win-win for everyone involved: gaming operators are profitable, players have legal access to regulated sites, and the state gets to take a cut off the top.
#4: Licenses could be for up to 10 years
The proposed legislation would create three classes of licenses: one for remote gaming operators located in a foreign country but earning revenue from players based in Romania, one for certain individuals working the remote gambling industry, and a third for local providers of internet gaming services.
And while past proposals aimed to issue licenses valid for up to 5 years, the current proposal would give operators the right to host gaming services for up to 10 years. This will go for operators of internet casinos as well as online sportsbooks in Romania.
Not only does this make life easier for providers, it should improve the overall functioning of the industry because more reputable companies will bid for licenses under these rules.
#5: Better regulated online casinos in Romania
The unregulated state of gaming in Romania over the past two decades has led a bunch of low-quality, shady and sometimes fraudulent sites to crop up.
Many knowledgeable Romanian gamblers wager their money only with reputable foreign sites such as those located in the UK and “white list” jurisdictions like Malta, Gibraltar and the Isle of Man, many simply don’t know a good operator from a bad one.
Giving the government the power to issue licenses and regulate the industry will greatly increase quality. Reputable, licensed sites will have a leg up, while half-baked, semi-legal operators will be shut down or pushed out of the market.