Bet365 Pays Romania €30m in Back Taxes Then Loses iGaming License

Home » Poker News » Bet365 Pays Romania €30m in Back Taxes Then Loses iGaming License

Wednesday, November 11th, 2015 | Written by Lucy Brown

Bet365 is expected to take action following a revocation of the online gambling site’s license to operate in Romania. Not only did the site lose the ability to legally provide its product within the country’s border, but it was also added to the country’s list of blacklisted gambling sites along with competitor bwin.party. While no specific reason has been given for the decision of the country’s regulatory body, Oficiul National Pentru Jocuri de Noroc (ONJN), it would appear it may have been as a result of Bet365 apparently continuing to accept bets from Romanian players after a September 10th, 2014, deadline was set for those iGaming operators applying for licenses to pay back money to the treasury.

Following the controversial decision, a Bet365 spokesman subsequently expressed disappointment over the move, stating that the company “at all times acted in compliance with all relevant Romanian and European legal and regulatory requirements”.

A Mysterious Move

In late October, the Romanian National Office for Gambling issued a statement stating that Bet365 was no longer able to accept players within Romania. Government officials stated that they had advised Bet365 to pay all those players with Romanian IP addresses the monies they were owed, while also alerting players to withdraw the money from their Bet365 accounts. The government warned that after 30 days, all access to Bet365 will be restricted, so that any funds that are not collected by that time will be forfeited by users. This move came as a surprise both to Romanian poker players and to Bet365, as the Romanian National Office for Gambling did not share any information about why they had decided to take action against the site.

Backstory Behind the Ban

The world of iGaming in Romania has been in a state of upheaval for over a year. Online gambling was legalized in the country back in 2010, but high tax rates made Romania an unappealing place for foreign site operators. Widely viewed as lacking and incomplete, the initial legislation did not even establish a proper regulatory commission to oversee online gambling, but since then, the Romanian National Office for Gambling has been established.

During the early part of 2015, the Romanian National Office for Gambling and the Romanian government lowered some of the tax rates to try and encourage foreign sites to apply for licenses. The new tax rate was set at 20 percent of gross revenues, and the fees for licensing were lowered. With the new rules in place, Bet365, Betfair, PokerStars, Superbet, Unibet, Sportingbet and 888 Holdings all applied a for licenses.

Pay Back Past Taxes

With new licenses issued, the Romanian National Office for Gambling threw online poker providers a curveball in May by demanding that all sites that were now licensed pay back taxes on revenues earned by illegal gambling involving Romanian players since 2009. The Romanian National Office for Gambling provided each operator with a total sum that they needed to pay to comply with the order. In order to keep their license, Bet365 paid the €30m that they were assessed to the Romanian treasury, yet the site was still banned. Likewise, Bwin.Party also said the company paid back €7.9 million, but was still blacklisted.

Cries of Injustice

The only possible explanation as to why the Romanian National Office for Gambling banned Bet365 was that they began to accept bets from players before they were officially approved for a license. Still, Bet365 is protesting the move in strongly worded statements. Many industry insiders believe that Bet365 will fight back against the move and try to appeal the Romanian National Office for Gambling. Bwin.party has already stated their intent to contest their ban in an international court, as the site, too, had paid their back taxes to Romania.

Gambling in Romania

Despite the controversial move to blacklisting a number of major online gambling companies, Romania is still considered a business-friendly market, and has one of the lowest flat-tax rates in the whole of Europe at just 15%. As mentioned, the country of almost 20 million people first partially legalized online gambling in 2010, but it wasn’t until the tax rate was made more attractive this year that a swell of interest in obtaining licenses were forthcoming from international operators. Nevertheless, around 40,000 Romanians still continue to gambled on blacklisted, unregulated sites, according to the country’s regulatory agency, leaving themselves open to possible fines of between US$1,300 and $2,600.

In addition to online gambling, the Eastern European country also has sixteen legal land-based casinos, nine of which are located in its capital, Bucharest, with the leading brands including Merkur Casino with eight venues, and Viva! Casino with three venues.