A revolution took place in Moldovan gambling industry in June, 2019. The state, which previously supported the industry, abandoned the loyal taxation type. Read about this and other important events in Moldovan gambling industry in our article.
Moldovan gambling industry general characteristics
Moldovan gambling is fully legal activity type. Both land-based gambling institutions as well as their virtual analogues are allowed here. The current industry’s qualitative growth occurred in the period when both Russian Federation and Ukraine neighboring states prohibited gambling services organization and provision-related activities. Besides the country has got nine betting companies and a lottery operator.
Just two large gambling institions, namely Casino at Hotel Jumbo and Napolean Palace Casino at Cosmos Hotel operate in the country, while being located in the capital – Chisinau. But Moldavians don’t suffer from lack of ground-based gambling institutions shortage, since they have got about 350 gambling halls.
It’s common in Moldova to divide all gambling into three categories – games of chance (the current ones include table games, slots and lotteries in casinos), wagers (bookmaker segment and sweepstakes) and games, involving special skills.
Moldovan gambling is controlled by both the Ministry of Finance, as well as the License Chamber.
The exclusive right to provide online gambling services is owned by the state monopoly – АО Loteria Nationala a Moldovei.
Gambling companies taxation in Moldova: change mercy to anger
There occurred a scandal in the Competition Council of Moldova in June, 2018, related to the gambling companies provision with VAT payment exemption privilege in the country, which results in the state treasury suffering from lack of millions.
The department representatives demanded the tax rules revision for the industry from both the Ministry of Finance and the branch service.
The department made calculations before charging the operators, according to which the companies managed to save 19.2 million leus in 2011 and 18.1 million leus in 2012 due to the VAT non-payment. The state provided 60 million leus to support the gambling industry in the period from 2013 to 2015.
The department noted, that state aid was provided to the gambling sector, despite the economic crisis and the lack of funding for important social programs.
However, it worth mentioning, that the gambling equipment purchase cost was 5.5 million leus cheaper for operators, due to both customs duties and import tax abolition.
It was decided to cancel the industry support programs. Besides there were made certain tax legislation amendments. The law entered into force on September 1. Lottery wins and sports bets will be taxed, according to the document.
Thus, in fact the players were required to pay income tax. Winnings of up to 240 leus are not taxable. Legislators determined such amounts insignificant. Therefore, the operators decided to refuse from the working conditions complication, since such prizes are paid at the lottery tickets ground distribution points.
Benefits were canceled for those companies, being the state monopoly partners, namely Novomatic AG and NGM Company.
Gambling halls territorial location change
As it was previously mentioned, Moldova is famous for its significant gambling halls number. The authorities decided to resolve the gambling halls issue in 2019. Gambling institutions should not be located closer than 200 meters from medical and educational institutions, according to the new rules. Besides it’s prohibited to open gambling halls near of the entertainment centers.
Betting market expansion
It was reported in April, 2019 that Kambi technology supplier for the betting industry entered into a partnership with Bulgarian National Lottery in order to subsequently enter Moldovan gambling market.
Generous sponsorship of the National Lottery
One of the Moldavian channels was provided with about 7 million leus (€ 350 thousand) by the National Lottery of Moldova in the first half of 2019, which it was criticized for by one of the people’s deputies.
The incident occurred due to the fact the channel’s representatives actively criticized the deputies’ decision to abolish tax benefits, which are described above in the current article. The operator would have paid about € 700 thousand to the channel over the year, if the private the monopoly’s partner had not announced the figures, listed for the advertising services provision.
Astronomical amounts explain the channel’s position, which defended the gambling monopoly’s rights to get benefits from the state.