Romania tries to up state budget with extra taxes for gambling industry

The Romanian state plans to introduce new taxes for the gambling industry. Firstly, it plans to more than double the entry tax for casinos, from RON 20 to RON 50 (or EUR 4.4 to EUR 11). The tax hike was triggered by the impossibility to check and tax the actual earnings of each gambler. Secondly, a change will be introduced for slot machine operators too: gambling companies will pay an extra EUR 200 a year for each slot machine they operate. Slot machines operators agree it is impossible for companies and the tax administration to highlight how much a gambler actually wins, and tax it, so they welcome the change, even if it represents a tax increase. So far, the state budget only cashed in the tax from Bingo, bets and lottery earnings. This was the main reason the state plans to replace the income tax on winnings from slot machines, video lottery, online gambling, casino and poker clubs. Instead however, the state will up the taxes paid by the gambling operators, with hopes to double its income from gambling taxes. Last year, the state cashed in some EUR 7.5 million from gambling income taxes. There are around 68,000 slot machines in Romania, a business which was estimated by Romanian media at some EUR 1 billion a year. Casinos will no longer have to apply a 25 percent tax on winnings for gamblers, as required by the existing regulations. This tax never really worked and the state did not cash in anything out of it, according to Odeta Nistor, head of the National Office for Gambling. Meanwhile, fixed, mutual and counterpart bets will be subject to a 2 percent tax on the net earnings for each ticket, replacing the existing system which applies a 25 percent tax on the earnings from multiple tickets. A similar 2 percent tax will also be applied to video lottery games. More changes will come gamblers' way, as the state wants to block access to online sports bets and gambling sites which are not owned by a Romanian company or not authorized to do business in Romania. By law, these online gambling operators will have to pay the Romanian state a tax of 0.1 percent for each played hand. The Authority will create a black list of sites unauthorized in Romania, and this market niche will be monitored by the National Office for Gambling via mirror servers installed by companies which apply for authorization. The European Commission last year asked several EU states, including Romania, to align their national regulations on gambling to the fundamental freedoms of the European block. Romania and five other countries were asked to provide information about restricting gambling services. The EC was preoccupied by whether national laws which require local authorization for gambling are compliant with EU laws. editor@romania-insider.com