EEGaming Interview with Odeta Nestor

EEGReport – Magazine: Since our last interview, many things have happened and Romania has becoming one of the largest gambling market in the region. Congrats for this achievement! How many online operators are there with a valid license and how many are you forecasting for 2016?

Odeta Nestor: Currently, on the Romanian market 19 online gambling operators are legally operating. They obtained the provisional operating right in accordance with Law no. 124/2015, which provided for a transitional period in which operators interested in the potential of the Romanian market can conduct business until the entry into force of new rules for implementing specific gambling legislation. From the discussions we’ve had, we can say that at least 10 more operators, some of them very large, expressed their intention to license in Romania, but have chosen to wait for the approval of the secondary legislation.

Now, with the entry into force of this new normative act, all gambling organizers, interested in the Romanian market will be able to apply for a full license, valid for 10 years.

The market in Romania is a vast market with significant potential for any organizer who wants to develop lawfully business, with all the advantages guaranteed by law (advantageously taxation, open relationship with the regulator etc.).

From our point of view, any operator wishing to enter the market in Romania in terms of legality, is welcome. About competition was said to be the invisible hand that regulates the market, as an expression of the level of development and diversification of the sector, which makes any customer able to purchase goods and services he needs/wishes, with the highest favorable rates, while also stimulating the manufacturers and the service providers to increase and improve their offer.

EEGReport – Magazine: If we talk about licenses, we must talk about the revoked ones as well, and there is certainly a story that needs to be told. It’s the case of Bet365 and Bwin. What happened and what is the outcome of the situation?

Odeta Nestor: For example, Bet365 asked the Court of Appeal to suspend the decision to revoke the provisional operating right, but the court ruled in favor of NGO. From my point of view, the suspension of the decision is no. 2.723/13th of October 2015 could have induced the idea that each operator can apply the legal provisions in its sole discretion, without considering the regulations in force rules or the authority.

These are issues to be solved by the institutions with jurisdiction in the matter, in this case the courts. For this reason, I would like not to comment too much on this subject, since the court decisions should be respected, not commented.

I believe that the legislation is very clear and leaves no room for interpretation. The best proof of this is the behavior of other large international operators that have agreed to stop their activity during the period that were not covered by legal documents. Therefore, the fact that some operators have decided to work illegally is effectively just their choice to position themselves above the other actors in the market, above the law and the authorities.

EEGReport – Magazine: On the 24th of February the Romanian Government has changed and amended the implementing rules of the law which governs on the organization and operation of gambling in Romania. What are the key changes that have been amended?

Odeta Nestor: Given the Government Emergency Ordinance no. 77/2009 on the organization and operation of gambling, approved with amendments by Law 227/2013, as it was amended by the Government Emergency Ordinance no. 92/2014 approved with amendments by Law 124/2015 regulating fiscal measures and modification of certain acts by Government Decision no. 111/2016 establishes the rules that operators must meet to obtain a license and authorization and for the good development of the business of traditional and remote gambling on the national territory.

Also, taking into account the amendments made by the legislation mentioned above, this decision draft establishes the legal provisions governing the detailed the remote (online) gambling and the general conditions on the activity, particular aspects related to participants remote gambling, licensing criteria for the operators of activities related to gambling.

Thereby, there are defined by categories of games, the requirements that a licensed gambling operator of Class I or licensed operators that offer related gambling activities Class II must fulfill and comply with them, both in order to obtain the license and the authorization and subsequently, in conducting the activity, complying with the norms, operational standards and regulations.

The Government Decision no. 111/2016 supplements the primary standard provisions regarding mandatory minimum rules to be respected by the remote gambling operators on the conditions for registration and for playing, protection of players deposits and other measures to protect the participants in the game in order to exclude minors and people with addiction problems.

It also establishes the obligation of undertaking national programs in the field of responsible gambling in order to prevent problem gambling, in an organized manner by setting up a foundation.

Also, this regulation contains provisions and technical measures for both remote (online) gambling and traditional gambling, especially slotmachines.

The new regulation clarifies the payment arrangements for the operators obligations to the state budget, it establishes the deadlines for payment of fees specific to the field, it defines terms used in gambling and sets up operating conditions for the newly introduced types of games (remote gambling and temporary traditional gambling). It also establishes the minimum overall winning percentages.

There were also established the operating conditions for a new type of equipment, AWP (gaming device with limited gain), a recreational equipment that will be installed in bars and that will limit both stakes and winnings.

A legal framework of penalties for non-compliance and to sanction the operators of remote gambling was necessary. Also, it was envisaged a preventive sanctions regime for operators that offer activities related to gambling with direct impact.

EEGReport – Magazine: As we know, the secondary legislation brought an end to the temporary licensing structure and authorized the transition of the 19 provisional licenses to a permanent status. How will future applicants be authorized, do operators need to go thorough a trial period before they receive the permanent license or they will get the permanent license once they apply and comply with the law?

Odeta Nestor: According to the legal provisions, until 31st of December 2015, the Surveillance Committee of the National Gambling Office could grant the temporary right of organization and operation of remote gambling for economic operators meeting the conditions set out in point a) – l) in art. II, para. (7) of Law no. 124/2015 approving the Government Emergency Ordinance no. 92/2014 regulating fiscal measures and amendment of certain acts.

The temporary operating right, once obtained, is to take effect during the validity period of one year from the grant date, thereafter a license being necessary for the operator to be able to continue his activity in Romania. During the term of this operating right, the organizer is able to apply for the full license, with 10 years validity.

All gambling operators who have shown interest to enter the Romanian market, can get a long-term (10 years) license, as long as they comply with the conditions imposed by law.

EEGReport – Magazine: How is the secondary legislation cataloging the affiliates and how was the decision taken by the operators and their affiliate programs?

Odeta Nestor: According to art. 2 letter b) of the Government Decision no. 111/2016 approving the Methodological Norms for the implementation of Government Emergency Ordinance no. 77/2009 on the organization and operation of gambling and amending and supplementing the Government Decision no. 298/2013 on the organization and functioning of the National Gambling Office, amending the Government Decision no. 870/2009 approving the Methodological Norms for the application of Government Emergency Ordinance no.77/2009 and to repeal Government Decision no. 870/2009 on the organization and operation of gambling, the affiliates are defined as follows: “The natural or legal person, who earns revenues under a contract with an organizer of remote gambling as a result of directing the players participating in a game on the website or platform of the organizer”.

The law was welcomed, including those carrying out gambling related activities. As proof, as soon as there was a legal possibility, they started taking steps to licensing, at the moment some of them already obtaining a license in Romania.

EEGReport – Magazine: Has any of the Romania based affiliates been granted licenses, yet? If so, which ones?

EEGReport – Magazine: Earlier last month we have written about the land-based to online convergence and it seems that almost all sports betting shops in Romania now have an online sports betting portal as well. How do you comment these moves and are the betting companies seeing larger revenues from the online market?

Odeta Nestor: Several global leaders such as PokerStars or Betfair activate on the online and sport betting market in Romania. The online segment of this market cumulates several hundred million euros and is in accelerated growth.

The online market in Romania is an attractive business environment. Among the advantages that our country has in this respect, we mention a very good internet connection, quality manpower and their salaries, the IT specialists.

That does not mean that the traditional gaming market will suffer. As I repeatedly have said, it is about different types of consumer and studies that were conducted in countries like Italy, Spain and France are evidencing that regulating the online segment has not significantly affected the traditional gaming market.

EEGReport – Magazine: Looking further ahead, do you think that new emerging markets should take the example of the Romanian legislation?

Odeta Nestor: The year 2015 accounted for the National Gambling Office the premises to create a strong and stable industry.

Although there were legal provisions that regulated online gambling, they were rigid and not adapted to market developments.

Now, with the implementation of the latest amendments, Romania is among the European countries with the best regulations in the field of online gambling.

If we are seen as a role model, this can only make us happy, because it is a new confirmation that our work is a good one.

EEGReport – Magazine: As a closing question, we would like to know and I’m sure all our readers will appreciate if you would share what are your plans for 2016.

Odeta Nestor: As always, we will try to be present at all major events in the field. The Romanian market is a potential market of interest to large operators, and therefore, we will use all communication channels in order to make the new legislative provisions known and understood and to show the potential that our country has for this industry.