Audit body calls for criminal investigation of Romanian gambling regulator
A new report blasts the regulator for licensee supervision and tax collection failings.
Romania.- A government report has called for a criminal investigation amid severe criticism of the Romanian gambling regulator ONJN. The Court of Accounts (CCR), which audits government agencies, detected serious discrepancies in the ONJN’s auditing of gambling licences and authorisation fees.
The main issues stem from the ONJN’s failure to enforce a legal requirement to gain remote access to online gambling licensees’ systems. The ONJN argued operators were not obliged to connect their IT systems to an ONJN monitoring terminal, but the CCR notes that emergency ordinance GEO no. 77/2009 enforces this by law.
The report said the ONJN’s failure to access online gambling operators’ servers meant the regulator was unable to verify transaction data. It also failed to apply penalties when it should have done so. Most significantly for the purposes of tax collection, it failed to detect potential discrepancies in RTP (return to player) levels that may have caused the state to lose between 3.3 and 4.3bn lei (€630m to €900m), according to the report.
The CCR asks why the regulator didn’t respond to blatant manipulations in which operators inflated return-to-player (RTP) rates to lower their tax liabilities. Some Malta-registered gaming operators had continued declaring an RTP rate of 92 per cent despite Malta reducing the minimum rate to 85 per cent from April 2021. The report estimates that this could have led to an authorisation fee difference of up to 1.2bn lei in 2022 and 1.8bn lei in 2023.
The auditor added that there was a lack of any verification on authorisation fees since 2019, resulting in a tax discrepancy of 79m lei (€16m), with additional penalties and interest of 37m lei (€7m). It has recommended that the regulator be subject to a criminal investigation, but it will be up to the government to make that decision.
Last year, the Romanian parliament approved Prime Minister Marcel Ciolacu’s executive order banning gambling in small rural towns. The ban, which Ciolacu signed as an executive order to ensure it was fast-tracked through the Chamber of Deputies, prohibits gambling venues and gaming machines in towns with fewer than 15,000 registered inhabitants. The government estimated that this represents 90 per cent of all localities in Romania.
Meanwhile, the Ministry of Finance caused controversy when it appointed Cristian-Gabriel Pascu as vice-president of the ONJN. Pascu was best known as a celebrity hairstylist and the owner of a beauty salon.
