Interview with Cosmina Simion NNDKP (EEGReport Magazine – Issue 1 – October 2015 – January 2016)

EEGReport Magazine: Since you are one of the many lawyers that was involved in the creation of the current online gambling framework in Romania, we would like to get as opinions as possible to get a glimpse into where this law will go and what it’s purpose is to the Romanian market.

Firstly we would like to get you opinion about why there is such small number of licenses that have been issued during this summer after the licenses were made available for the temporary period. Are operators waiting to see what happens at the next review of the framework?

Cosmina Simion - NNDKP

Cosmina Simion(NNDKP): The Romanian gambling legislation, as last amended by Law 124/2015 which entered into force on 12 June 2015 provides for the possibility to apply for both a full gambling license as well as an interim right to operate gambling activities in Romania. While the full license is granted for a 10 years period, the conditions that need to be met are substantial in nature especially in terms of the technical requirements which are also yet to be set under the secondary legislation expected to be enacted any day now, but also by the technical order to be issued under a decision of the President of the National Office for Gambling (“NOG”). Throughout the summer the NOG has carried consultative discussions with industry representatives related to these  technical requirements, which ultimately resulted in a draft technical order that was notified to the European Commission and is now subject to a stand-still period to expire on 26 November 2015.

It follows that the process for applying for full licenses is yet to be opened.

On the other hand, applications for the interim right to operate online gambling activities in Romania can be submitted until 31 December 2015.  Hence operators are still in time to apply for this interim right.

However, the online gambling operators who performed gambling activities in Romania prior to the entering into force of Law 124/2015 had a 90 days period calculated from the moment the law entered into force (i.e. expired on 10th of September) to benefit from a fiscal and criminal amnesty upon presenting a financial audit (showing both stakes, winnings and operator’s GGR)covering past performance starting with 24 December 2010, followed by the payment of a 20% authorisation tax on GGR, as well asthe fixed license fees for past performance.  As such, the operators who have not cleared their past in the indicated timeframe have or will be blacklisted.  The conditions for being removed from the black list are yet to be decided upon by the Supervisory Committee of the NOG and by the Order of the President of the NOG.

The list of operators who have already been granted with the interim right to operate, as well as the list of operators who have already been black-listed, can be found on NOG’s website, but note should be taken that neither of them is up to date currently.

EEGReport Magazine: What can be the cause that will determine the NOG(ONJN) not issue a a full license for certain operators?

Cosmina Simion(NNDKP): As long as the conditions laid down by the gambling legislation are complied with, the NOG will have no reasons not to issue a full license to the applicants.

EEGReport Magazine: Back-tax, back-tax, back-tax…..In your point of view and we ask your expert opinion, is this a good way to attract operators? We all know that many large operators who were really popular among the Romanian betting crowd are awaiting their trusted brands to get licensed, but they will have to wait, since there is this back-tax that nobody want to pay.

Cosmina Simion(NNDKP): The NOG made significant efforts to deliver a new and modern legislation, where the significant changes targeted the introduction of a possibility to clear the past by way of paying tax for past performance at a level that the Romanian state authorities considered to be both fair and commercially viable for the operators.  By reviewing the list of operators who were already granted the interim right to operate, one can find big names of global operators, as well as names of operators of a smaller scale.  Also, a few selected others that have been present on the Romanian market at different times in the past, but who do not intend to continue their operations here in the (near) future will have submitted the documents and paid the fees in order to clear the past and benefit from the amnesty provisions.

EEGReport Magazine: How about the affiliate side, the current legislation doesn’t allow the advertising of licensed casino, sportsbetting operators and their bonuses by affiliates who could just simply join an affiliate program and start advertising their favourite brand who maybe just entered the market. We know that this current framework is just temporary, but are there any chances that the € 6,000 license fee to be abrogated and maybe replaced by an income tax? It’s kind of funny to pay that huge license fee and maybe earn less than that in a year from revenues generated by referring players.

Cosmina Simion(NNDKP): The current legislation provides that all suppliers to the gambling market (i.e. providing management and hosting facilities, payment processors, manufacturers and distributors of software, affiliates, certifiers and auditors) need to obtain a second class license and pay an annual fee of € 6000.  While we do not believe this to change in the near future, we understand that NOG will license commercial agreements under which several suppliers function under the same umbrella where one assumes the liability.  We may have more clarity over this issue once the secondary legislation is enacted.

EEGReport Magazine: How do you see the Romanian online gambling market in the next 5 years? Will there be a significant growth in the Economy and will there be more jobs created?

Cosmina Simion(NNDKP): The state budget has probably become richer already by several tens of millions Euros. And the authorities are finally having (or at least should have) the satisfaction of reaching the goals that have been pursued by all Governments in the past 7 years- they have obtained money from online gambling while also turning a black market into a white one.

Going further, once the premises have been laid down for this stream of revenues, the Romanian Government will continue to raise taxes while it is certain that this business will generate more work on the market to a certain extent, especially on the supply side.

EEGReport Magazine: Why do you think operators, software developers and payment processors should come and open new business in Romania?

Cosmina Simion(NNDKP): The new and modern legislation has definitely put Romania on the map, a country with appetite for gambling and a population of 18 million inhabitans.   As lawyers, we cannot proclaim to have visibility on the commercial process that leads to the decision to enter or exit a market, but fFrom where we standremarkable progress has been made and Romania can definitely cannot be ignored when you are a remote gambling operator.


Cosmina Simion(NNDKP) – Bio:

Partner Cosmina Simion has over 16 years of experience as a Romanian law qualified lawyer, with previous coordination roles in global law firms, combining this expertise with a specific approach built during her in-house role at a US group, leader in the regional media sector.  She is well-versed in dealing with all matters pertaining to the organisation and operation of gambling activities, being involved in the review of the gaming legal framework, including representing clients during negotiations with the Romanian National Gambling Office. \

A member of the Bucharest Bar, Cosmina regularly authors articles in the field and contributes in domestic working groups seeking to improve the business and regulatory approaches in the gaming sector.