Romania`s Gambling Sector Faces Significant Tax Increases

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In a move aimed at addressing the country’s budget deficit, the Romanian government has approved a new fiscal package that introduces sweeping tax increases across various sectors, with the gambling industry being particularly hard hit. The decision, which passed on July 4, 2025, is a core part of the government’s strategy to bring the annual deficit down to a target of 7% of its GDP, as required by the European Union. However, the new Romanian gaming regulations are not without their critics, who argue the private sector is being unfairly burdened.

The new legislation significantly restructures the tax landscape for gambling operators and players alike. Online gambling operators will see their annual Gross Gaming Revenue (GGR) tax rate jump to 27%, a considerable increase from the previous 21%. Retail operators are also affected, with their GGR tax rate now set at 23%. This is in addition to broader tax increases, including a rise in the standard VAT from 19% to 21% and the dividend tax rate from 10% to 16%.

For slot machine venues, which have recently faced tighter regulations and a ban on gambling advertisements, the new law introduces an additional annual tax of €1,000 per machine. These increased costs come at a time when the sector is already under pressure, prompting concerns about the financial viability of smaller businesses.

Players are also directly impacted by the changes. The new regime dictates that all gambling winnings will now be taxed at 4% at the source, up from the previous 3%. Crucially, the government has eliminated the tax-free threshold, meaning that even the smallest wins are subject to taxation. This is a significant departure from the practices of neighboring countries like Belgium, France, and Germany, where gambling winnings are not taxed at all, and Poland and Spain, which offer generous tax-free thresholds. The lack of a threshold means players making small bets may find themselves losing money even when they win, a scenario that critics fear will drive casual gamblers away from licensed platforms.

While the new tax rates are steep, they represent a moderation from the government’s initial proposal, which had suggested a minimum 10% tax on all winnings. The final legislation capped the tax at 4% for winnings under €2,000. However, for higher winnings, the rates become even more punitive. Winnings between €2,000 and €13,500 will be taxed at €80 plus 20% on the amount over €2,000. For any winnings exceeding €13,500, the tax is a substantial €2,350 plus 40% of the amount above that threshold.

Critics, including the Concordia Employers’ Confederation, have voiced strong opposition to the tax hikes. The confederation, which represents companies that contribute 30% of Romania's GDP, argues that the government is unfairly placing the burden of its past economic mismanagement onto the private sector. Dan Șucu, president of the confederation, stated, "We strongly oppose the new tax regime and consider it deeply unfair for the private sector to pay for the government’s mistakes in recent years."

Concerns are also rising that these steep taxes could have unintended consequences, potentially pushing players toward offshore gambling sites that operate without regulatory oversight. Such a shift could expose players to a higher risk of fraud and financial harm, while also deepening the country's existing struggles with unregulated gambling. The government's decision follows a period of immense pressure on the Romanian Gambling Regulator (ONJN), which an audit found had lost nearly €1 billion in revenue between 2019 and 2023 due to regulatory failures. The ONJN has since been working to tighten its enforcement, including implementing a mandatory self-exclusion database, but experts worry the new taxes may counteract these efforts by encouraging players to seek unregulated alternatives.

With the government standing firm on the necessity of these measures to restore the country's economy, the long-term impact on Romania's gambling industry and its players remains to be seen. What do you think will be the biggest challenge for the Romanian gambling industry under this new tax regime?