Bingo in Romania: A Game the State Always Loses

Romanian gambling laws - GamingZion

Romanian newspapers claim the company organizing the country’s most popular bingo show is trying to avoid paying taxes by filing for insolvency.

With the recent scandals surrounding the National Lottery and online casinos, Romania seems to have one of the most controversial and unstable gambling markets in Europe.

Now it looks like the country might be facing another scandal, and this time it’s about bingo. The company behind the televised bingo show broadcasted on the popular TV channel Antena 1 owes EUR 160,000 in tax, local gambling news says, and is considering filing for insolvency to avoid paying the debt.

Under Romanian gambling laws, accumulating a debt older than 30 days gives authorities the right to withdraw an operator’s license, but the National Gambling Office (NGO) is in no hurry to enforce these regulations.

A history of scams

According to details published on the National Agency for Fiscal Administration’s website, Metropolis Bets had EUR 160,000 in debt at the end of the last fiscal year. Most of it (EUR 94,000) is owed to the national social security service, but the state budget also has to collect around EUR 35,000 from the company.

• Bingo was always extremely popular among Romanian players, but sometimes hope can turn into tragedy.

• After winning EUR 13,500 at bingo, Vasile Farcau contracted a bank loan to start building a house for his son, hoping he could use the prize to pay it back. But the money never arrived and this drove the man to a desperate act.

• In November 2013, he tried to set himself on fire in front of the Metropolis headquarters in Bistrita, in an attempt to get his money back.

According to a law published in 2009, whenever a company “forgets” to pay taxes, the NGO is supposed to notify members of the gambling licensing commission, which operates as part of the Ministry of Public Finance. At this point, the gambling authority can withdraw the firm’s license.

The two owners of Romanian bingo operator Metropolis Bets SRL, Radu Chifa and Petru Rus, have a very shady past. The pair used to own and manage Phoenix Games SRL, another company operating bingo games, which lost its gambling license in 2012 after accumulating over EUR 1 million in tax debt and pulling the same insolvency trick.

Chifa and Rus have been in the gambling business for years and it seems to be working out quite well for them, as the two partners also own stakes in 12 other companies operating in the casino industry, constructions and real estate.

Lucky for them, no one is asking any questions about their unpaid taxes this time, and it is believed they get this special treatment because NGO president Odeta Nestor was once hired as their personal accountant.

Figures were wrong?

The Administration of Public Finance from Bistrita Nasaud, the city where the company is registered, is required by law to officially notify the NGO about the debts accumulated by Metropolis Bets, if they are older than 30 days.

But the company’s management claims all taxes have been paid within the deadline. It’s the National Agency for Fiscal Administration’s website that’s outdated, Radu Chifa told reporters. The businessman added that the company has made a deal with local authorities to compensate part of the debt with the VAT return owed by the state.

Metropolis Bets manager Eugen Cosma also claims that the debts were not older than 30 days and that the firm has paid all its financial obligations to the state, figuring that the employees working for the Administration of Public Finance forgot to update the website.

But the institution’s online database showed that the debt dated from September 2013 and remained unpaid until at least December 30, 2013. Either way, Metropolis somehow got away with it.

Bingo scam, reloaded

The last season of the Superbingo Metropolis show ended in a huge scandal. Thousands of players were cheated out of their money and ended up not getting their prizes. The scam left a EUR 1.2 million hole in the state budget as well.

In February 2012, the Ministry of Public Finance withdrew Phoenix Games’ gambling license and cancelled the entire operation. As soon as the scam was discovered, the firm filed for insolvency, to make sure it wouldn’t have to pay one penny to the state or to any of the bingo players who had won. Employees didn’t get their salaries, collaborators weren’t paid and around 100 players were denied their winnings. The prizes amounted to a total of EUR 1,6 million.

It was then when the Government decided to put an end to televised bingo shows by officially banning them, in the summer of 2012. Not for long, thought, because the newly formed Government brought them back in 2013 and Radu Chifa and Petru Rus were back in business, under a new name: Metropolis Bets.

Romanians are almost used to such scams and scandals, but there are still plenty of people gullible enough to fall for them. It looks like it will be a long time before investors and players trust the Romanian gambling market.

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