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EC Rejects Romanian Draft E-Gaming Legislation

by Ulrika Lomas, Tax-News.com, Brussels

07 October 2010


The European Commission has issued a detailed opinion which is against the Romanian draft legislation regulating online gaming and betting.

The Commission has strong doubts about the compatibility of the draft legislation with EU law and this means Romania cannot adopt its draft in its current shape.

Romania is the third country in the last 12 months to receive such an opinion from the European Commission and will have to re-notify and adjust its draft legislation as in the case of Denmark and Poland.

The European Betting and Gaming Association (EGBA) has identified a number of provisions in the draft which may conflict with EU law. These include:

  • The discriminatory prohibition of marketing and advertising activities for EU licensed companies which are not authorized in Romania;
  • The requirement for EU licensed online betting companies to have their servers in Romania;
  • The requirement for EU licensed online companies to be established in Romania; and
  • The unjustified exclusion of online pool betting while all other forms of online gambling would be allowed.

The draft legislation specifies a fees tariff for the licensing of gambling games, ranging from RON0.8m (USD0.26m) for online gambling games to RON0.2m for most other online and interactive betting activities.

There would also be annual fees for the authorization to operate gambling games of 5% of the actual income, but not less than RON0.25m, for fixed-odds bets and online bets. For bingo games organized via internet communication systems, as well as landline or mobile telephone systems, the annual charge would be 20% of the actual income, but not less than RON0.4m. Online gambling games would be subject to a 1.5% charge on the actual income, but not less than RON1m.

There would also be a minimum value of the subscribed and paid-in share capital on the date of application for obtaining the licence to organize gambling games.

The Romanian draft legislation was notified to the European Commission and member states on July 2, 2010. The detailed opinion extends the standstill period until November 3, during which time Romania cannot adopt its draft legislation.

A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
TAGS: European Commission | commerce | law | offshore e-commerce | Romania | fees | offshore | e-commerce | gambling | licensing | legislation | offshore e-gaming | regulation | European Union (EU) | Europe

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