There are Jews that are happy, too

We've made the Israelis happy.

Every week, hundreds of tourists from Israel spend their weekends in Bucharest, practicing gambling tourism. The travel packages comprise visits to the casinos of luxury hotels in Bucharest.

They will do so even more after the new legislative draft for the National Office for Gambling gets approved, which stipulates that individuals will be exempted from paying taxes on winnings from slot machines, videolottery, fixed-odds betting, casinos, poker clubs and on-line gambling.

The government wants to take this measure because it claims there are no ways to find out how much a gambler earned. In other words, the Government says that there are no methods to monitor those who earn money from the aforementioned games.

Sources from the market explain the situation as follows: "You go into the casino and you make money at blackjack; you move to the roulette table and you lose; you make it back on craps, but you lose it on the slot machine. How to determine the taxable income? How do you collect the taxes in online gambling? The manager of the game is registered in an island somewhere and has servers in the cloud, but processes billion Euros from all over the world. Do you bust down the doors of the players? Do you violate banking secrecy and that of card operations?".

Considering the imagination it demonstrated recently in coming up with the tax on electricity poles, in this particular case, the authorities could have forced the operators in the industry to resort to withholding at the source, by which they would be the ones to withhold the taxes and then transfer them to the state budget. The accounting department that gambling operators should have should know how to do that.

This practice already exists in other sectors, where some taxes are withheld at the source.

Market representatives say that there are situations where "the amounts that people gamble are not known". What more could be needed to deal with that problem besides monitoring by the staff of the gambling operators?

This measure contrasts even more with the fact that the elimination of taxes on gambling comes just as the Government announced a number of new taxes, such as the one on fuel or special constructions, which led to fear and protests, as insolvencies and bankruptcies are expected.

The gambling tax favors the rich even more, while the gas and diesel fuel excise hurts everyone's pocket.

Sorin Constantinescu, a representative of the gambling market and former advisor to the Romanian Lottery, told us: "Until 2007, gambling used to be taxed, except for casinos and slot machines. taxes were later introduced for those two categories as well, but nothing was collected, because it was impossible to prove the participation in the game. You can't know how many banknotes are inserted into the device and how much money the player takes out. That leaves the taxes on earnings that can be proven, such as lotteries, Bingo, Jack-pot and raffles, while for the other types of games, for which the government wants to introduce new taxes, different taxes will be introduced - a 200 Euros/year tax will be introduced for slot machines, money paid by the operator, and 50 lei for any individual that visits a casino, regardless of whether they play or not. By eliminating taxation, the desire is to encourage online gambling, because without that, no foreign company will come in to invest, because there is no country where earnings from such sources are taxed".

In other words, the authorities tax the operators, exempting the winners from taxes. But can anyone estimate whether the sizes of the two sources of revenues for the state budget (player earnings, versus taxes for casino operators) are comparable? And why would a tax applied to operators not include a tax on an amount earned by the player?

Gambling revenues earned by individuals are currently considered taxable revenues.