New Gambling Legislation – the Right to Organize and Exploit Remote Gambling Games until December 31st 2015

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Published in “Casino Inside”, issue 55

Recently, on June 9th 2015, the long awaited Law no. 124/2015 for approving and amending EGO 92/2014 was published in the Official Gazette. The new amendments will enter into force in 3 days after publishing, namely on June 12th, 2015.

A transitory period for online gambling, ending on December 31st, 2015, was included in law 124/2015 amending the primary legislation so that the market still functions until the secondary legislation comes into force and until both the operators and the facility services providers (software and hosting providers, payment processors, auditors etc.) fulfill the conditions to apply and be granted full license.

Thus, based on the these provisions, operators may apply, subject to requirements less strict than the ones applicable for obtaining the license to organize and the authorization to exploit remote gambling games, to be granted this (provisional) right to operate on the Romanian market (for no later than December 31st, 2015).

Until this date, most likely (i) the legal framework will be complete and will allow applications for full licenses and (ii) the operators will be prepared to fulfill all requirements in order to apply for full license.

This right may be granted to both operators present in the past (or currently) on the Romanian market and those that were never active on this market.

The difference is that the ones in the first category (i.e. operators currently / in the past on the Romanian market) need to pay, within 90 days from the entering into force the law, an amount representing the licensing fees previously applicable to online gambling games plus an authorization fee, calculated as 20% from GGR – for the entire period while the operator has taken players from Romania.

If this fee is paid, the operator having conducted online gambling activities in the past will be exempted from criminal and fiscal liability. As far as the calculation of this fee is concerned, the gambling operators will have to provide the regulator a financial audit to reveal the amounts cashed from the players as participation fee and the prizes awarded (including jack-pot) differentiated for each type of gambling and respectively day or calendar month or, in such cases, for gambling games where the organizer cashes a commission from the participants/winners of gambling games.

As for the audit report needed for the calculation of the entry fee / amnesty tax, from the discussions with the authorities’ representatives, it results that they also require a proof that the financial analysis is based on the genuine and certified data from the operator’s servers. They also expect the operator to include in that audit the number of Romanian players and their transactions since December 2010 and all such details need to be certified as real and genuine by an independent auditor.

Thus, the payment of the entry / amnesty fee will have the effect of having the criminal liability removed only for the operator providing unlicensed gambling activity before, at maximum, 90 days from the entering into force of the new law. Therefore, after this fee is paid, the operator should either stop performing the activity or should apply and obtain the right to operate in accordance with the new legislation.

The requirements imposed by Law 124/2015 for obtaining the right to organize and operate remote games of chance until December 31st 2015, the Supervisory Committee (the Committee) of the National Gambling Office (NGO) may grant this right to the economic operators fulfilling the following requirements:

  • submit the supporting documentation of the company;
  • hold a bank account for depositing the players’ money, held at a bank from Romania;
  • prove that the software used for carrying out remote games of chance activities, was certified by a specialized laboratory (which holds a ISO 17025 certification), authorised to conduct activities on Romanian territory, in an EU member State, or in a state signatory to the Agreement on the European Economic Area, or in the Swiss Confederation;
  • appoint an “authorized representative” of the company, where the company is registered in other Member State of the European Union or in a state signatory to the Agreement on the European Economic Area, or in the Swiss Confederation and such representative should have the domicile on the Romanian territory and should be empowered to conclude contracts on behalf of the foreign entity and to represent the foreign entity before the state authorities and competent courts of Romania;
  • prove that the central information system of the remote gambling organizer has a system of registration and identification of game participants and presents the audit of the entire system by a specialized laboratory (which holds ISO 27001 certification), authorised to conduct activities on Romanian territory, in an EU member State, or in a state signatory to the Agreement on the European Economic Area, or in the Swiss Confederation;
  • prove that the communication equipments and the central point where the organizer’s central information system is placed on the Romanian territory or in other state member of the European Union or in a state signatory to the Agreement on the European Economic Area, or in the Swiss Confederation;
  • prove the payment in advance of the fees provided in the Government’s Emergency Ordinance no. 77/2009, as approved and amended by Law 246/2010, with subsequent amendments and supplementations. The authorization fee is due for all game participants that access the game platform from the Romanian territory and all the Romanian citizens that do not have their fiscal residence in another state;
  • provide the data related to the company’s turnover and a business plan;
  • provide a list of all the contracts they have concluded with: the payment processor, the gaming platform, the auditor, the certifier and its affiliates, although these entities don’t currently hold a license in Romania;
  • provide the NGO’s Committee a sworn statement of the organizer’s legal representative stating the fact that it has / it has not carried remote games of chance in Romania through a gaming platform customized at the organizer’s level, for all the participants to the game which have accessed the gaming platform from the Romanian territory and for all the Romanian citizens not having a fiscal residence in another state;
  • provide any other documents or information requested by ONJN;
  • all correspondence, documents and information requested by ONJN will be made available in Romanian language, certified by an authorized translator, upon case.

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