Romanian Regulatory Mistakes Could Lead to $1 Billion Loss in State Tax Revenue

The country’s Court of Auditors has accused the National Office for Gambling (ONJN) of failing to fulfill its statutory duty to monitor and control online gambling operator activity since its inception in 2013.

In a report published on 21 February, the auditor mentioned the possibility of notifying Romania’s criminal prosecution bodies about these failures. This is primarily due to the ONJN not enforcing the legal requirement to have remote access to all licensed operators’ systems.

According to the report, this oversight resulted in potential errors in the amount of money collected in authorization fees, notably due to a discrepancy in taxation compared to actual RTP (return to player) levels. The ONJN never examined the implications of the reduction of RTP requirements in Malta, where most of Romania’s operators are registered, in 2021.

State budget revenues were significantly impacted by these shortcomings, with unpaid tax differences of over 78 million lei ($16.4 million/ £13 million) identified for 2022 and 2023 alone. However, the Court of Auditors report suggests there is a potential difference in undeclared authorization fees of up to 4.8 billion lei ($1 billion) between 2019 and 2023.

“Since its establishment until now, the National Office for Gambling (ONJN) has never monitored or controlled the activity of remote (online) gambling organizers and has not met its legal duties such as analyzing the data stored by the game organizers or verifying the accuracy of their periodic reports,” the Court of Auditors stated in the report.

“During the mission, external public auditors discovered numerous irregularities in the office’s activities. An important consequence of these irregularities is the failure to generate state budget revenues at a level corresponding to the collection potential from this area of economic activity.”

## ONJN’s Further Failures

The Court of Auditors has issued a series of recommendations to the ONJN, aiming to address the deviations found.

These included specific measures to update operational procedures for licensed gambling operators. The ONJN must ensure it has the capability to remotely access online gambling servers located in Romania.

Romania’s gambling regulator’s failures may have cost the country almost $1 billion in revenue, according to a critical report issued by the government auditor.