BUSINESS

Romania’s online gambling back tax demand swells government coffers

TAGs: ONJN, romania, tax

romania-online-gambling-back-taxRomania’s back-tax demands of online gambling operators as a condition for new license application added a hefty boost to government coffers last year.

According to Romania’s National Office of Gambling (ONJN), gambling operators paid €269m in taxes in 2015, 71.3% more than the previous year. Stripping aside contributions from online operators, the government collected a mere €70m in gambling license and authorization fees in 2015.

Last year’s revenue surge came courtesy of the government’s demand that online operators seeking licenses under the country’s new online gambling regime must pay a sum equaling 20% of their total revenue from Romanian punters since 2009.

Spain pulled a similar last-second back tax stunt prior to liberalizing its online market in 2013. Romania’s windfall will no doubt encourage other governments to make back taxation a prerequisite for market entry, a possibility that could have serious ramifications if a market the size of Russia decided to play back tax hardball.

Romania has since issued 19 online licenses, 12 of which went to operators based in other European Union markets. But some international operators, including Bet365 and Bwin.party, have seen their online domains blacklisted by ONJN despite having complied with the back tax demands.

Earlier this month, Romanian legislators adopted secondary legislation that brought an end to the temporary licensing structure and authorized the transition of the 19 provisional licenses ONJN has issued to permanent status.

Payment processor SafeCharge, which recently announced a tie-up with Romanian sports betting operator SuperBet, claims that over 1m of Romania’s 19.5m residents are active sports bettors, generating annual wagers in excess of €1b. Football remains the most popular wagering sport, followed by tennis, boxing, hockey and dog racing. Next year, look for a boost in ‘outrunning the taxman.’

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