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Romania to promulgate the on-line gaming bill. Online operations not authorized in Romania illegal.

December 23, 2010 News & Reports

On November 16, the project of the law on the organization and operation of gambling games for the first time regulating online gaming and betting and declaring illegal and punishing online operations not authorized in Romania has been approved by the Chamber of Deputies (decisional chamber) with 171 votes pro, 1 against and 4 abstentious (176 MP’s present), following a tacit approval by the Senate on the 19th of October. On November 24, the law has been sent to the Romanian Presidency for promulgation. Promulgation is expected any day now.
As forecasted, the law has been approved with very few changes in respect of the criticism of the EC. To the point, the concessions made concern:

  • The exemption from the rule requiring location of technical equipments on Romanian territory, established for undertakings authorized by an EU Member State for online and phone betting, bingo and games and which have the technical equipments (servers etc.) located in an EU Member State, provided they connect these technical equipments to the Romanian State institutions or authorities, authorized in this respect, or to the Romanian operators authorized by the Commission.
  • The minimum number required for TV bingo agencies has decreased from 150 to 48 (one in each district capital, plus one in each sector of Bucharest).
  • The level of the guarantee fund required for organizers of on-line games (other than lotto, bets and bingo) has decreased from 4m Lei to 1m Lei.
  • The annual license fee has decreased from 200k Lei to 100k Lei for on-line betting organizers, from 200k Lei to 100k Lei for on-line bingo organizers, from 800k Lei to 400k Lei for on-line games organizers (other than bingo, bets, or lottery). Additionally, it has been established the formerly missing annual Loteria Romana license fee to some surprising low levels for on-line lotto (to 500k Lei), and for mutual bets (to 200k Lei), which are closely comparable to those established for non-monopoly organizers.
  • The level of the annual authorization fee has decreased from 20% to 10% in the case of bingo (by internet or land/mobile telephony) organizers (but no less than 400k Lei). In case of on-line games organizers, the fee remained 1.5%, but no less than 400k Lei instead of 1m Lei as according to the notified draft.
  • It has been introduced the annual authorization fee for Loteria Romana’s monopoly for organizing on-line lotto games (800k Lei) and on-line mutual bets (400k Lei).

Under the adopted law, the ban on any players participating on the Romanian territory to games not authorized in Romania is now much clearer.
The EC’s question concerning whether the National Company “Loteria Romana” is also granted monopoly for on-line mutual bets and lottery has been expressly answered: Yes, by internet, mobile and land line telephony.
As the Loteria Romana will be able to enter agreements with natural or legal entities for the joint organization of (online) gambling, it became very clear that this new law has created the premise for the toughest competition in the Romanian gaming marketplace, that of winning Loteria Romana’s joint venture contract for on-line mutual bets and especially, for on-line lottery, as the Loteria Romana will need to contemplate a B2B approach with experienced on-line operators on these two new services it’ll soon wish to launch on the market. That is in case the cards have not been already shuffled.
Although it might be just an escape of the law, it is not very clear who and more importantly if the Loteria Romana’s on-line mutual bets and on-line lottery is supervised by the Romanian State institutions or authorities, authorized in this respect (or by the Romanian operators authorized by the Commission) or not, because the provisions establishing the competences of these authorities or authorized undertakings do not include supervision of on-line mutual betting or on-line lottery.
According to the Romanian Constitution, the law is expected to be promulgated by the President of Romania within twenty days after receipt of the law. Before promulgation, the President of Romania may return the law to Parliament for reconsideration, and he may do so only once. In case the President has requested that law be reconsidered or a review has been asked for as to its conformity with the Constitution, promulgation shall be made within ten days from receiving the law passed after its reconsideration, or the decision of the Constitutional Court confirming its constitutionality. In my opinion, there aren’t any reasons to believe the Romanian President will return the law for reconsideration, so, after promulgation, the law will enter in effect in 3 days since its publication in the Official Gazette of Romania.
In order to secure a solid position against possible EC infringement procedure being launched against Romania, all it remains is that the Romanian Government demonstrate the arguments to the exceptions from the application of the EU common market and fundamental freedoms principles and ECJ jurisprudence by the application norms to be issued in 30 days since the publication of the Law in the Official Gazette which will provide further details on the rules concerning minors’ protection, security, correctness, integrity and transparency of the gaming operations addressing possible vulnerabilities of this economic sector to potential criminal activities, as well as the exposure to money laundry and acts of terrorism financing risk.”
Bogdan Mararu
Partner, Mararu & Mararu Lawyers | Romania


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