Romania introduced a new contribution payable by economic operators in the gambling sector through the passage of Law no. 286/2022 for the implementation of Government Emergency Ordinance no. 83/2022, which amends Ordinance no. 51/1998 regarding the improvement of the system of non-reimbursable financing of cultural projects. This legislation aims at improving the system of non-reimbursable financing of cultural projects and establishes the Romanian National Cultural Fund, a structure intended to support and implement cultural projects in Romania.
The law imposes a 0.5% contribution, payable to the Romanian National Cultural Fund, and due by “operators in the gambling sector, including in the online medium”. The 0.5% contribution is stated as applying to “revenues” obtained by such operators acting in the gambling sector (including online).
This provision raises a number of interpretation issues, including:
- whether the contribution requirement applies to both Class I and Class II licence holders; and
- the method of determining the revenues in respect of which the contribution is calculated.
Regarding the first issue, the literal interpretation of the legal provision suggests that the requirement applies to both Class I and Class II licence holders, as the phrase "economic operators in the field of gambling" does not distinguish between Class I operators (i.e. gambling operators) or Class II operators (such as marketing affiliates, auditors, software developers, providers of hosting services for gambling operators etc). The term “operators” itself is consistent with the terminology of the gambling regulations, which encompasses both types of licensees.
Regarding the second issue, we note that Romanian gambling legislation offers a definition of the concept of "revenues" only for Class I licence holders (i.e. gambling operators), which is expected to be used for the calculation of this contribution. For Class II license holders, however, the determination of revenues is still not defined (and this metric is not relevant at this time from the perspective of gambling regulations, as license taxes and other contributions are not calculated on the basis of revenues for Class II licensees).
The more likely interpretation is that the contribution should be calculated only par rapport to those revenues that are obtained directly from gambling-related activities. This would imply that for companies which obtain revenues from several different sources, including one or more that are gambling-related, the 0.5% contribution to the Romanian Cultural Fund should be calculated only in relation to such revenue which is obtained in the gambling industry.
Moreover, it would be logical to assume that only revenues obtained on the Romanian market should be considered in the computation of the 0.5% contribution to the Romanian Cultural Fund, but we note that this is not explicitly stated in the new legislation. This raises additional questions for operators which are active in different markets, including Romania.
Amidst these debates, it is expected that the Romanian authorities will release further guidelines for implementation in the short term. CMS is closely. monitoring these developments. As of the date hereof, however, operators active in the gambling industry are already required to calculate, pay and declare this contribution to the Romanian National Cultural Fund. The first reporting deadline was 25 December 2022 for the month of November 2022.
For more information on this new contribution payable by operators in the gambling sector, contact your regular CMS advisor or local CMS experts Cristina Popescu, Andrei Tercu and Sorin Predescu.