Romania to OK Online Bets

Romania’s legalization of online gaming may not be the windfall the government is hoping for. Critics of the new policy point out that Romanians’ appetite for gaming has dropped significantly since the recession. The government still hopes online games will help plug a budget gap.

Only five casinos remain, down from 22 in ’09

In a bid to reduce its budget deficit, Romania will legalize online gambling, which the government hopes will “create a massive new revenue stream,” according to Agence France Presse.

Cristinela Nistor, head of Romanian gaming regulator Oficiul Na?ional pentru Jocuri de Noroc, estimates that online gaming will bring in €100 million in direct taxes in 2015, “increase public revenue and stimulate the market, and at the same time harmonize Romanian legislation with European norms.”

Currently, gambling in Romania generates an estimated €800 million (US$910 million), including €150 million (US$170 million) of tax revenues last year, or 0.1 percent of the total economy, according to ONJN figures.

It’s a good news-bad news scenario for gaming operators. Trade association leader Cristian Pascu said the government is “finally opening the tap,” but added that the high tax rate on gaming is already “at the limit of what we can bear.”

To keep their licenses, gaming companies will pay annual fees of up to €180,000 (US$205,000) depending on their revenue, reported AFP. And slot operators will see their fees increase from €5,700 to €20,000 per year (US$6,500-$22,760).

As if that’s not enough, the government will also impose a new “sin tax” from €1,000 to €5,000 (US$1,140-$5,690) to fight gambling addiction. “These measures will lead to a contraction in the market and won’t bring in any extra revenue,” said Alexandru Debrezeni, director of the Romanian Bookmakers Association.

Romania’s seesawing economy has led to a sharp drop in gambling in the country, which is one of the poorest in the European Union. The number of casinos has dropped from 22 in 2009 to just five today. But slots are more popular than ever. The number of machines has grown to 72,000, up from 60,000 in 2009.