Killing Business: Romanian Gambling Laws Chase Investors Away

​Less than a year since it has been approved by lawmakers, Romania’s online gambling legislation needs rethinking.

After the European Commission has urged members of the Union to clarify their policies on online gambling, the betting industry has gone through a serious reform. Most European states have either passed new laws or are in the process of figuring out the best way to tackle the problem.

Meanwhile, Romania is one of the few countries which seem incapable of dealing with the matter once and for all. Ever since local lawmakers have approved new regulations last year, members of the parliament and heads of the gambling authority have been going back and forth between liberalizing and restricting the market.

During the last few months, the gambling authority has drawn up a few proposals regarding online gambling sites in Romania, but none of them made it to the decision makers’ negotiating table. The result is a complete legal blur, which seems to convince investors that it’s better to stay away from the Romanian market. At least for now.

Wrapped in vagueness

As far as internet gambling in Romania is concerned, things were pretty vague before March 2013, when officials sought to improve the existing legal system. In fact, all they did was create a new gambling authority to monitor and control all online activity.

Of course, there is plenty to monitor, as there are hundreds of English gambling sites accepting players from all European countries, with dozens even offering services in the Romanian language. Among the multiple options out there, a few even accept the country’s currency.

Online casinos have been available in the state for years, but none of them are actually authorized for a very simple reason: current Romanian gambling laws require all licensed operators to have their offices and servers based within the country.

The best online casinos available to Romanian players are:

• Europa Casino
• Casino Tropez

• Titan Casino
• Vegas Red Casino

• William Hill Casino Club

With most betting operators and online casinos licensed in Gibraltar or Malta, asking them to move their headquarters to Romania simply to obtain a license seems a little far-fetched to any business owner.

Let’s make it (il)legal

This means that none of the options currently available for local players are considered legal by the National Gambling Office. Odeta Nestor, president of the gambling authority, explains: “Certain companies are trying to offer their services outside the country where they are authorized to operate, and this is simply unacceptable.”

In fact, according to the European Union, this is not only “acceptable” but also recommended, as the Union’s regulations require all member states to grant free movement of services. So instead of opening the online gambling market to all European-licensed companies, the state’s lawmakers have actually managed to kill it. Currently, there are no online operators holding a Romanian license.

Last December, the gambling authority took things further by threatening to forbid players’ access to foreign-based websites. Officials announced they were planning to block all online operators that don’t have their servers based in Romania and they were discussing it with local Internet providers.

Europe vs. Romania

While the national gambling authority has forwarded a few proposals to Romanian lawmakers – including a suggestion to impose a new tax of 0.1% on each hand played in online casinos and the proposal to block foreign websites – none of them were actually discussed by the Parliament.

This may be because the European Commission (EC) has already decided to look into the issue and did not like what it found. After sending several written notifications to Romanian authorities, asking them to change their online gambling policies, the EC eventually decided to launch formal infringement proceedings against the state’s laws, last November.

An official press release issued by the EC detailed: “The Commission has concerns about the compatibility of national provisions subjecting the provision of online gambling services to establishing a physical presence in the recipient Member State, prescribing a specific legal form on the basis of national law, requesting prior consent of the authorities in relation to any changes in the shareholder structure or banning foreign capital with EU law.”

With regard to the Romanian legal framework for gambling the Commission has asked further questions on the coherence of the national gambling policy.”

Online gambling still in deadlock

The new gambling laws have been in act for less than a year, and EU officials are already warning Romania that they have to change them. It remains to be seen whether the state’s authorities finally pass a functional law or risk being fined by the European Commission.

With all the legislative impediments foreign investors are facing, the future of online gambling in Romania remains uncertain. One thing is sure, though: with no licensed operators, the country isn’t able to tax impose taxes on their profits, not to mention players engaging in online games or wagers risk being fined, so no one is a winner in this confusing game.