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Romania Proposes Draft Legislation Decentralising Gambling Regulations

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Cagla Taskin
Cagla Taskin
Content Manager
Updated:
Reading Time: 3 minutes
Romania proposes local authorities control over gambling.

Romanian lawmakers plan to introduce new legislative measures that would enable local municipalities to decide whether or not to allow gambling operations within their jurisdiction. The draft legislation was recently shared by Prime Minister Ilie Bolojan as part of a new strategy to overhaul existing gambling regulation.

Romania Drafts Gambling Legislation: A Quick Summary

  • The new legislation will allow city halls to decide whether to allow gambling activities within their jurisdictions, where such activities are to be located, and whether to impose a special annual tax on gambling operators.
  • The federal government will not impose limits for the annual tax, and it will be entirely up to the city hall to decide. This will grant additional control to local authorities and restrict the proliferation of illegal gambling operations.
  • The announcement has been widely celebrated by local leaders who are hopeful that the additional powers vested in the local authorities would allow them to clamp down on illicit gambling operations.

Decentralised Gambling Control to Benefit Local Authorities

During a press conference last week, President Ilie Bolojan said that city halls must have greater control over gambling halls within their jurisdiction. Bolojan noted:

It is not enough to authorise gambling at the national level. City halls must be able to establish areas, whether the whole city, a single street, a neighbourhood, or a resort, where, based on a special tax, they can determine the intensity of such activities.

Bolojan took note of the proliferation of gambling halls across Romania, stating that city halls currently have no control over gambling operations within their jurisdictions.

According to media reports, the Prime Minister confirmed the government’s plans to decentralise gambling regulation:

There has been a lot of talk about gambling. We will come up with a provision that will decentralise the authorisation. Today local authorities have no competence in this field.

Local leaders are enthusiastic about the government’s stance on the country’s gambling regulations. Nelu Popa, Mayor of Reșița, a small town in the Banat region of Western Romania, said in a press conference that he would use the proposed legislation to rein in unlawful gambling operators in the city. Popa also welcomed the broader decentralised agenda that would allow mayors to ban gambling activities within their jurisdiction:

The local authority can decide to place these activities on certain streets or areas, according to local interest. Also, the local authority can decide to establish a special annual tax that will be paid by the licensed gambling operator that carries out the activity in this way.

Tightening Regulatory Stance a Positive Sign for Romania’s Gambling Ecosystem

In addition to efforts targeting land-based gambling activities, Romania has been working hard on building a regulated iGaming industry for quite some time now. The government approved a fiscal package earlier this month, raising taxes across several jurisdictions, including gambling, to meet fiscal deficits before next year’s budget.

Online gambling platforms will now pay 27% tax on Gross Gaming Revenue (GGR), a 6% increase since last year. Retail operators, on the other hand, must now shell out 23% in taxes. Slot machine operators will also witness a sharp rise in tax rates to make up for the revenue deficit.

Players must also pay a 4% tax on winnings, which will be deducted at the source and with no minimum threshold. People familiar with the industry have warned that such measures would push players toward offshore gambling platforms, undermining the government’s goal.

The revenue package is part of the government’s push to fill the void in Romania’s deficit budget, which stands at 7% of its GDP. Between 2019 and 2023, the county lost approximately €1 billion in gambling revenue to illicit operators due to regulatory lapses by the National Gambling Office (ONJN).

The Romanian Parliament, in a historic move, passed a law banning gambling venues in towns with fewer than 15,000 residents. This was the first definitive step in the country’s fight against gambling menace in over three decades. Romania also took steps to make self-exclusion mandatory for gambling operators within its jurisdiction. These moves lay the foundation for a secure and sustainable gambling industry in the future.

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