On 29 December 2018 the final form of the law introducing new taxes for the online gambling sector was published in the Official Gazette by Government Emergency Ordinance no. 114/2018 (“GEO no. 114/2018”). GEO no. 114/2018 entered into force on the same day.

1. New tax duties for the online sector

Article 53 of GEO no. 114/2018 provides that starting with 01 January 2019 the online gambling organizers are obliged to pay a monthly tax duty of 2% of the cashed-in participation fees.

The tax duty is calculated, declared and paid to the state budget until the 25th of the month following the one in which the participation fees are cashed-in.

The method of calculation of the tax duties provided in the previous paragraphs will be established via an order issued by the President of the National Office for Gambling (“NOG”). The method of declaration and payment will be established via an order issued by the President of the National Fiscal Agency.

2. Amendment of the gambling law

Article 58 of GEO no. 114/2018 provides that a new activity will be established within NOG in order to promote compliance with principles and measures regarding responsible gambling (the “Activity”). The Activity will be financed by annual contributions paid by each licensee as follows:

(i) organizers of online gambling (class 1 licensees) – EUR 5,000 per year;(ii) legal persons that are providers of services related to gambling activities (class 2 licensees) – EUR 1,000 per year;(iii) organizers of gambling activities that are state monopoly (class 3 licensees) – EUR 5,000;(iv) organizers of traditional gambling activities (class 1 licensees) – EUR 1,000 per year.

The above contributions will follow the enforcement procedure provided by the Fiscal Procedure Code and will be enforced based on a notification issued by NOG that represents writ of execution.

As per article 92 of GEO no. 114/2018, in 30 days as of its entry into force, NOG will notify the economic operators that performed activities during the period 2015-2018 and that owed the contributions, in order to pay them. The economic operators should pay the contributions within 5 days as of the receipt of the notification.

Please note that the previous form of GEO no. 77/2009 (the Gambling Law) that was amended by GEO no. 114/2018 provided that a foundation of public interest promoting responsible gambling was supposed to be established, while the licensees were supposed to contribute to the fund administered by such foundation. Until the entry into force of GEO no. 114/2018 such foundation has not been established.

3. Potential issues related to the measures proposed by GEO no. 114/2018

GEO no. 114/2018 may raise issues of validity / constitutionality, especially on what concerns:

• the difference between the fiscal regime applied to online and traditional organizers of games of chance, resulting from different taxes and different levels of contributions to the Activity;
• potential retroactivity of the contribution to the Activity imposed to economic operators for the period 2015-2018;
• potential taxation of the same revenues of the online organizers of games of chance twice, as they will simultaneously pay the license and authorization fees and the new tax of 2% of the participation fees;
• potential issues of non-constitutionality resulting from the lack of predictability, transparency and proportionality of such tax duties;
• potential issues of non-constitutionality resulting from the lack of urgency required from the Government in order to be entitled to adopt a GEO providing new tax duties (in fact the GEO no. 114/2018 lacks any specific motivation of the urgency in what concerns the regulations on the gambling sector).

Considering the potential issues above, GEO no. 114/2018 and subsequent acts adopted for its implementation (including NOG’s notifications or other tax decisions) may be subject to challenges (including for constitutionality review) before courts of law and/or the Constitutional Court or even subject to a preliminary question to ECJ.