Alliance for the Union of Romanians (AUR), a political party, has proposed further development of the gambling-tourism integration in Romania.

Signed by 37 of its right-wing MPs, the party argued that the current positioning of gambling establishments on national territory lacks “economic logic” and fails to correctly capitalise on the potential of its correlation with the tourism sector for economic gains.

AUR’s draft regulatory proposal seeks to amend Romania’s Gambling Act in a feasible way that strategically ties in the gambling sector with the 56 officially recognised tourist resorts across the country.

In particular, AUR wants to tie in gambling regulations directly with the national tourism development strategy that it argues will lead to a boom in integrated tourism destinations on the principle of “balanced territorial development”.

The party believes that Romania can better leverage the synergies between both sectors and strengthen Romania’s position in Europe as an entertainment hub.

What’s in it for the economy?

The party identified the economic benefits of its proposal by focusing on the potential for investments in “hotels, restaurants, conference centers and other related services”, which would then on paper stimulate the economic development of tourist resorts.

For those gambling companies already present in tourist resorts, AUR said they will gain an additional competitive advantage and unlock more opportunities to scale, while new investors will be incentivised to focus on large-scale integrated projects.

As a reminder, gambling venues are currently banned in Romanian towns with under 15,000 registered inhabitants, with the exclusion of tourist resorts. However, operators are only allowed there on a special three-month licence.

Besides attracting foreign investments, other benefits that AUR’s assessment envisions are the creation of qualified jobs, a larger number of foreign tourists, an increase in the average length of stay, and an increase in the average spend per tourist.

The draft also wants to retain tax revenues from the gambling industry on levels “comparable with the current ones”. However, it did mention a potential redistribution “in favour of communities with a tourist vocation” – hinting at more favourable tax conditions for integrated resorts or physical venues located in tourist areas.

What was also mentioned was a hike in tourism revenues from beneficiary resorts through additional local taxes – which could otherwise be interpreted as introducing more taxes for tourists.

In fact, this was directly alluded to in the party’s five-year financial impact projection where it mentioned substantial increases in tax collection as a result of a hike in VAT revenues generated by an integrated tourism-gambling sector.

Problem gambling thrown in for good measure

The party has also added in problem gambling for some flavour, but this where the argument falls a bit flat on its face.

Reading through the proposal, the AUR mentioned that tourist resorts will have trained personnel and specialised infrastructure to monitor players and reduce gambling-associated risks.

Although not specifically outlined, this is typically good news when it comes to obstructive behaviour in-venue due to let’s say intoxication. But ‘gambling risks’ is a very general term, which could also include problem gambling in itself. This is where it gets tricky.

How can trained personnel look for gambling harm indicators in a player who is from the UK for example, when both Romania and the UK use a vastly different system to measure the markers of gambling harm?

Perhaps this is the time to mention that the European Committee for Standardisation recently approved a unified guideline on markers of harm for European countries thanks to EGBA, but its voluntary nature leaves the decision of whether it will be used to each individual member state.

Secondly, the brief talks about tourist resorts helping with the “sustainable protection of low-income citizens against exposure to disproportionate financial risks”. This also lacks weight, as someone who is “low-income” can just as easily play online from their hotel room without having to visit a nearby physical casino.

The above argument can also be applied to the AUR’s next statement – “reduction of indirect social costs generated by compulsive gambling problems in local communities”.

In fact, the draft does mention a potential increase in the concentration of gambling halls in designated tourist areas to “limit the access of people at a financial risk”, but fails to take a stern stance on whether these halls should be reduced in numbers everywhere else.

All in all, the AUR did state that its draft has been made compliant with all European requirements for long-term national economic strategies, and that it expects a response from Parliament due to fiscal significance of the proposed legislation.