ROMANIA
cases the sum insured by the policy will be the amount of €7,000,000, it is likely that the insurer will request some form of collateral from the operator. Failure to meet these conditions could technically result in increased premiums or policy cancellation.
regulatory framework in Romania and in fact the end of 2023 and beginning of 2024 brought numerous other legislative amendments which impact the local industry. Among these changes, the following are worth noting: - A gambling license can be obtained by an EU/EEA legal entity only in case a permanent establishment has been registered in Romanian for tax purposes. This amendment has been introduced via a Government Ordinance which entered into force on 6 October 2023, and which provided for a grace period of six months for online operators which have already obtained a license to comply with the new permanent establishment requirement. This new obligation naturally increases the tax burden applicable on operators since, besides the gambling specific taxes, corporate tax related to the Romanian operations must also be paid at the level of a permanent establishment; - While for B2C operators the tax guarantee requirements have been increased, for certain B2B suppliers these requirements have been repealed. More specifically, prior to 6 October 2023 testing laboratories which applied for a B2B license as a certifier or auditor needed to secure a guarantee in the amount of €250,000. This obligation no longer exists in the law so from this particular perspective the Romanian market became more attractive for testing laboratories servicing the gambling industry; - Starting at end of April 2024, a joint-venture operation can be established only in case the partners of the B2C licensed operators hold their own B2B license and only in case such partners are “affiliated with” the operator (the new legislation does not however detail how the affiliation requirement should be construed). This new requirement creates an extra level of complexity (especially for the land-based market which heavily relies on joint-ventures) since the common business model used in the past in Romania was that the licensed B2C operators entered into joint-ventures with various third parties that did not have their own licenses; - Starting at end of April 2024, all B2B suppliers that hold a license in Romania must implement technical measures to prevent unlicensed gambling platforms
Claims Proces s
By comparison to other “standard” insurance products where the insurer might need to conduct an investigation to verify the legitimacy of the claim, an insurance meant to cover the risk of non-payment of the tax duties will have a more straightforward claim process. Thus, the mere fact that an operator has failed to pay one of the taxes due by the applicable legal deadline technically means that the risk has materialized, and the state authorities can mount a claim against the insurance policy.
Benefits for the Industry
The introduction of an insurance option to the Romanian gambling legislation benefits the industry by providing a flexible and financially viable way to meet regulatory requirements. Furthermore, this new alternative introduced in the law also brings an additional layer of oversight, as insurers will conduct their own assessments and audits of operators. However, the key factor determining the viability of an insurance product tailored for the gambling industry will remain the level of and calculation method for the premium that will need to be paid by the operators. While this new insurance option has been a legal possibility for more than six months and certain insurance companies in the Romanian market have already declared that they are working on launching a product for the gambling industry, it seems that we are still in the early stages. It remains to be seen whether licensed operators in Romania will be able to rely in future on insurance as a viable way of meeting the guarantee requirement imposed by law. The full picture: regulatory update – Romania The significant increase in the guarantee amount related to tax duties does not represent the only recent change to the
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IMGL MAGAZINE | SEPTEMBER 2024
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