Version: 08072003
Editor: Franka Pals
Publisher: Novamedia
Disclaimer: Novamedia disclaims all liability for information provided within the ”Novamedia European Gaming and Lottery Files”.The information is supplied by independent journalistic sources. No parts of these files may be reproduced in any form by print, photo print, microfilm or otherwise, or re-distributed electronically in any form without written permission from the publisher.
The Republic Romania, located in the Southeastern part of Europe with access to the Black Sea, has borders in the North with the Ukraine (and clockwise), Moldova in the East, Bulgaria (where the famous Danube river is the frontier) is in the South and in the East are the Serbia and Montenegro and Hungary. The 1989's scenes, in the Capital Bucharest of the brutal dictator Nicolae Ceausescu, which no one will ever forget, lead to the overthrow of the last communist stronghold. The process of political transformation of Romania from a communist society to a competitive democratic will still take quite a few years. The transition towards a market economy is not an easy road. Especially when you plan an economy based on the IT Industry.
Now Romania has the eighth largest IT market in Eastern Europe. In 2002, IT spending reached $460 million, composed of computer hardware (62 percent), packaged software (14 percent), and computer services (24 percent) according to the International Data Corporation. Hardware represents a larger portion of the markets in less IT-penetrated developing countries. Market growth will average 10 percent a year with software and services growing faster than hardware sales.
The IT sector is one of the most dynamic components of Romanian economy, and one that is receiving priority attention from the government. Over the last ten years, the sector has experienced impressive development, offering Romania the latest technologies in many areas. The most important IT user is the government, which makes up about one-third of GDP. It is implementing some of the largest IT projects in the country, including integrated systems for tax collection and National House of Health Insurance and various e-government and ecommerce projects. In 2001, the government also launched a five-year, multi–million dollar project to supply 2,500 schools with computer labs and Internet access, which will generate a surge in the PC market. Imports from major U.S. suppliers make up about 55 percent of Romania's computer market.
Internet penetration in Romania is small, but is growing fast. There are about 200 ISPs, most of which are resellers of services provided by ten major "wholesalers." Good computer literacy and English language skills, a widespread cable TV network, and decent penetration of mobile telephony are factors that will support increased Internet access. On the other hand, Internet development is hindered by an insufficient installed base of PC's (only about 1 million), the limited use of credit cards (only about 3 million in use in 2002), inadequate banking infrastructure to clear payments made via the Internet, and a poor level of online banking services. Only about 2 percent of Romanian Internet users have bought anything online.
Projects for upgrading the communications infrastructure to allow greater Internet penetration are strongly encouraged by the government, which has also issued special regulations to implement a series of e–government projects and to place greater emphasis on e-commerce. Growth is also linked to the full deregulation of the telecommunications market, which could promote Voice over Internet Protocol (VoIP) services over the long run.
Regarding e-commerce, Romania has a high incidence of Internet credit card fraud, which has discouraged international vendors from making payments electronically to purchasers in the country. To counter this, the government has passed an e-commerce law that defines and punishes cyber crime. The law includes criminal sanctions for falsifying cyber-pay instruments, carrying out and accepting fraudulent financial transactions, or performing unlicensed cyber transactions.
Banc Post, one of Romanian main banks, has introduced a new online banking solution, which allows clients to transfer money between accounts that they hold with the bank.
Romania's first multimedia messaging service is offered by Orange Romania. With the Nokia MMS solution, Orange Romania customers can use MMS-capable phones to exchange rich multimedia messages containing text, images, graphics, voice, and audio clips. The Nokia Multimedia Terminal Gateway allows users of non-MMS phones to also enjoy MMS service.
Romania, a 'fresh' NATO-member, is looking for the accession to the European Union (2007?). A privatization program, imposed by the IMF, is on its way. Therefore RomTelecom, the monopolistic national telecom, will be privatized.
Foreign direct investment knows many incentives. Industrial- and technology-parks in Romania have been promoted through government ordinance no.65, approved by Law no.490 in July 2002. An industrial or technology park benefits from significant incentives:
Inflation rate in 2002 was 17.8% and the unemployment rate was 8.2.
Here should be mentioned, writing on the gaming industry, that the Rummycup Tile game is coming from Romania. In a period that card games were forbidden in Romania, Mr. Hertzano, in the 1940's, came up with an original idea -to exchange the cards with tiles. After the World War II the Hertzano family immigrated to Israel. Today Rummikub® is the third best-selling game in the world and the first best-selling tile number game. It is also Israel's #1 export game! 30 million Rummikub® games are sold to date in 48 countries across 4 continents, printed in 24 languages.
| Population: | 22,317,730 (July 2002 est.) |
|---|---|
| Age structure: | 0-14 years: 17.4% (male 1,992,505; female 1,898,122) 15-64 years: 68.8% (male 7,618,801; female 7,726,300) 65 years and over: 13.8% (male 1,274,881; female 1,807,121) (2002 est.) (* Source: CIA) |
| Currency: | Leu (ROL) |
| GPD | purchasing power parity - $152.7 billion (2001 est.) GDP - real growth rate: 4.8% (2001 est.) GDP - per capita: purchasing power parity - $6,800 (2001 est.) |
| Telecom | Romania is the second largest telecommunications market in Central and Eastern Europe and offers significant growth potential in the fixed, mobile and Internet sectors in the medium to long term as a competitive market becomes established. The telecom market has progressed significantly since 2001, closing gaps in the EU accession and establishing a new independent regulatory body in September 2002. Liberalisation Since the market was fully liberalized at the beginning of 2003, some 670 providers have registered with the regulatory authority (ANRC) to offer a range of telecommunications services. However, very few of these companies have valid business plans and can actually be expected to enter the market. The head of parliament's IT commission foresees no more than 10 real players operating in the market in the future. Aside from incumbent RomTelecom and the country's existing mobile operators, these are likely to include larger players, such as cable operator Atlas, the telecom arm of the state electricity utility, Transelectrica (which will benefit from its own fiber-optic network), and ISPs such as pan-regional Euroweb. RomTelecom, which is owned by the Greek company OTE (54%) and the Romanian government (46%), has failed to cement its position as a monopoly provider prior to liberalization. Not only has it done little to entrench its interests, there is still a considerable amount of potential pent-up demand for all types of telecom services. Fixed-line penetration of 18 percent is one of the lowest in Europe, particularly in rural communities. Challenges A significant obstacle to market growth, particularly for the rollout of high-speed asymmetric digital subscriber line (ADSL) services, will be RomTelecom's ownership of the local loop (the Alast mile@ providing access to end customers). New providers will either need to use Rom-Telecom's network or an alternative network, such as cable. The ANRC has been holding a series of discussions with RomTelecom recently on interconnection tariffs, and has designated work groups to assist in the formation of a new regulatory framework. ANRC has no experience in a liberalized market and even the most well-intentioned regulator can only do so much without previous practice or precedents. |
| Internet: | Internet penetration in Romania is currently small, but the growth rate of the sector is significant (50 percent/year). There are about 200 ISPs, most of which are resellers of services provided by about ten larger ISPs. Computer literacy, good English language skills of the population, the existence of a widespread cable TV network, and reasonably high penetration of mobile telephones as a basis for mobile Internet, are factors that will support increased Internet access. Factors negatively impacting Internet development include a low rate of PC penetration, the limited use of credit cards, and the lack of necessary banking infrastructure to clear payments made via the Internet. Projects for upgrading all types of infrastructure to allow greater Internet penetration are strongly encouraged by the government. The implementation of a series of e-government projects as well as greater emphasis on e-commerce, for which the government has issued special regulations, are expected to lead to a fast increase in Internet penetration. Growth of the sector will also be closely linked to full liberalization of the telecom sector, which will allow current subscribers to wired telephony to opt for VoIP services. By the end of 2002 some 13% of the Romanian population used the Internet and 6% were frequent users, accessing the net at least once per week, according to a recent study undertaken by the market research company GfK. While 53% of the population had heard about Internet but never accessed the Internet, an amazing 33% Romanians say they have never heard about it. As regards the activities of Romanian users online, the Gfk study found that 49 per cent use the net for e-mail, 46 per cent use chat services, 37 per cent search the internet for information about specific events, 26 per cent read news, 21 per cent search for jobs on the internet and 18 per cent use the network to interact with the authorities. Most Romanian users access the Internet in public places and very few have access at academic institutions. The average time spent online is 5.8 hours per week. (* source: www.osec.doc.gov |
| Mobile Phones | Mobile telephony has developed dramatically over the last five years. Mobile penetration, although relatively low, has surpassed fixed-line penetration reaching 22 percent by the end of 2002. There are four service providers with a total of more than 5 million subscribers: Mobifon (GSM 900 MHz), Orange (GSM 900 MHz), Cosmorom (DCS 1800 MHz), and Telemobil (CDMA 450 MHz). Mobifon and Orange account for 95 percent of the mobile market. The most revolutionary development in this market was the launching, in late 2001, of the CDMA digital 450 MHz network by Telemobil, an operator supported by the U.S. firm Qualcomm. Romania was the first country to deploy CDMA 2000 in Europe and the first in the world to build a high-speed mobile digital 450 MHz network using CDMA technology. The current trend in the market is to encourage a range of 3G technologies. If the Romanian government manages to sell the four 3G licenses for which it intends to organize an international tender, IMT 2000/UMTS may be commercially available by the end of 2004. The licenses are valid for 15 years. Each winner will pay a $35 million fee for the release of radio spectrum, and payments can be made in tranches. |
The Governmental Ordinance No.159/1999 set up the National Company "Romanian Lottery" SA. By its setting up, after the incorporation to the Registry of Companies, the Independent Administration known as "National Lottery" was repealed on 25 October 1999.
The Romanian Lottery's shares are owned fully and exclusively by the State of Romania.
Chronological following order of the gambling legislation:
Website: www.loto.ro
1999
In 1999 by an Emergency Government Ordinance No. 159 Compania Nationala Loteria Romana S.A (CNLR) was established, replacing the communist-era Loteria Nationala. At the beginning of September of that same year a new gaming product was launched, under the name "ORA UNU A VENIT" (One o'clock is here). This new product actually binds three concepts: the instant lottery, the simple ticket draw and the game involving directly the player in the draw, by means of a TV show.
Each ticket represents a multiple gaining chance: either instantly, within the instant component of the game, or by winning the right to participate in the draws, taking thus part in all the draws organized for a specific issue.
The draws were hosted by a family show, taking place each Sunday and produced together with the TV chain TELE 7 ABC. The simple draws offer money prizes, of 10 or 20 million leu. In the draws involving the viewers, the owner of the ticket is called by telephone, then she or he picks a number between 1 and 16 on a video-wall. Each number hides a prize: either a car or a money prize of 10 up to 50 million leu. If the telephoned person doesn't pick up the phone or the player does not answer, the assistance in the TV studio pick a number for the winner.
The instant tickets were produced by ROMPAC SRL in sequential issues of 2 million pieces and their sale price was 3,000 leu/piece.
2000
In September the new product "Joker" came on the deck.
In the last week of December, 2000, the CNLR said it had signed a $100 million deal with Greek lottery systems firm and operator Intralot, listed on the Athens Stock Exchange since 1999, to develop a nationwide network of video-lottery games.
"The $100 million investment will help us build a modern network of video games across Romania over the next 10 years," CNLR's spokesman General Manager Nicolae Cristea told Reuters.
Intralot, a subsidiary of Intracom, added that the agreement would cover the installation of an informatics system and terminals, as well as the organization, operation and promotion of new games.
Cristea said the network would be operational within two years. The project would create 5,000 new jobs, he added.
The total number of video terminals was expected to reach 15,000. The U.S.-based company International Game Technology (IGT) would supply the equipment. Intralot said the project would be the first national network of video-lottery games in Eastern Europe.
2001
The Romanian Government decided in 2001 to proceed with the extension of the existing on-line lottery network for regulating the market in order to reduce the illegal gaming through CNLR' s launch of video lottery games. This project is expected to increase the revenues for the Romanian State, as well as, to control and abolish the illegal gaming.
2002
January
The traditional 'New Year's Eve' Lotto 6/49 was successful. The January Lotto 6/49 had 'Special Drawings with main prizes 12 billion ROL and a 3 room-apartment.
February
In February the break-open ticket "Sanse Ta" was launched. Joker has a new prize of over 1.2 billion ROL plus a car.
March
In March the special "Spring" drawings for Lotto 6/49 was organized. The prizes were a.o. money, apartments and cars. Loto 5/40 and other games are on an ascending trend.
April
In April "Loto-Prono" weekly magazine celebrated the no 2,500 issue with a circulation 2,124,000. "Lotozodiac" game was launched.
May
May brought the biggest prize ever at Loto 6/49: over 27 billion ROL, plus a 3 room–apartment. "Noroc" break-open ticker was introduced, offering instant prizes and supplementary drawings.
June
In June three extraordinary "Pronosport games (Toto) were organized for the final round of the 2002 Korea-Japan Worl Championship Football. Joker hits a new record: 20 billion ROL plus a 3 room–apartment.
July
July was the month where a new series of "Auto" instant tickets took off.
August
In August the last 'on the beach" Noroc drawing took place.
September
September is the "Romanian Lottery month":
October
In October CNLR's receives from the Romanian and Bucharest Chamber of Commerce and Industry awards the first prize in the Top-IX.
Famous Nadia Comaneci shoots of the "Roman Lottery Cross Race" , with over 20,000 participants. And of course a special lottery was organized around this race.
November
In November the broadcasts of drawings are relaunched at Romania 1, the channel with the highest ratings. The "National Lottery headquarters" move to a new high-tech-like building. Loto 6/49 is another recordbreaker: 31 billion ROL plus a 3 room apartment.
Following a 13-year agreement with CNLR, Intralot has undertaken the supply and all related services for the operation of the video lottery system, which has been officially launched in November 2002. The agreement provides for the installation of up to 15,000 on-line VLT's, connected on–line real time with a central system, at CNLR retail outlets and additional points of sale that will be established by Lotrom, Intralot' s subsidiary in Romania.
Lotrom has also undertaken the development of an on-line satellite communications network based on VSAT, which has been fully operational since early 2001. The installation of the VSAT terminals at selected agencies was completed in 2002 and has already reduced substantially CNLR' s operating cost.
December
In December it looks likes that "September is the Romanian Lottery Month", should be renamed into: "December is the Romanian Lottery Month". Watch this:
Already 500 video lottery terminals (VLT's) have been installed by Intralot in 2002.
2003
The in total 2,000 video lottery terminals will be installed in 2003. The games offered currently are:
The Romanian VLT on-line operational model has been in the spotlight and has become a role model for other state lotteries. The launch of VLT's not only has contributed significantly to CNLR's revenues, but at the same time the lottery's on-line games (lotto and numbers) have experienced an increase of 130%.
It's worth mentioning that the state run VLT operation by using an on-line system and supporting progressive jackpots, has managed to compete successfully the private slot machines operators in the country.
* Bingo was introduced by CNLR and became a national mania when also TV companies, started to broadcast the 'housewives' favorite gambling pastime'. "Antenna 1" was the first channel to understand the power of Bingo on TV. On December 26, 1999, then the biggest prize in the history, $ 1 million, of all Romanian game shows was won. "Pro TV" was the following television company, coming with a Bingo TV Show. "National Television" was the third broadcast operator trying to eat a piece of the Bingo cake. In collaboration with Liberty Oradea, "TV Romania 1" got also a significant market share with its National Bingo Liberty on Sundays. CNLR countered this competition with higher money prizes and 3 room apartments. The gaming market raised continuously, proofing once again that this industry flourishes in economic good
Compania Nationala Loteria Romana (CNLR) has recorded a sharp increase sales for the first five months of 2003. totaled $50.1 million, compared to $25.4 million in the same period last year, a remarkable increase of 97.2%. Sales for whole year (May 2002 - May 2003) reached $89.3 million, a year-on-year increase 58.9% over the period May 2001 - May 2002 ($56.2 million).
| 1998 | 1999 | 2000 | 2001 | 2002 | |
|---|---|---|---|---|---|
| Total Income | 868,990 | 1,234,502 | 1,438,000 | 1,748,754 | 1,989,733 |
| Total expenses | 653,452 | 1,015,415 | 1,088,000 | 1,307,355 | 1,497,389 |
| Gross Profit | 215,538 | 219,087 | 350,000 | 441,399 | 492,344 |
| Tax on Profit | 84,149 | 89,451 | 87,500 | 110,624 | 88,452 |
| Payment out of net profit | 59,125 | 58,247 | 118,125 | 160,513 | 137,095 |
| Social capital | 7,595 | 106,944 | 106,944 | 106,944 | 106,944 |
| Private capital | 200,938 | 334,862 | 587,354 | 595,951 | 1,250,153 |
| Assets | 128,941 | 262,124 | 283,951 | 312,842 | 856,942 |
| Rate of profitability (gross profit/total costs)% | 33 | 27 | 32 | 33.76 | 32.88 |
| Rate of profitability (gross profit/total income) | 25 | 18 | 24 | 25.24 | 24.74 |
| Total expenses (per 1,000 leu activity volume) | 752 | 822 | 755 | 747 | 753 |
| Average staff | 6,287 | 5,733 | 5,088 | 4,362 | 3,895 |
| Labor productivity | 139,30 | 201,70 | 276.50 | 371.23 | 510.84 |
| Year | Sport forecasting | Joker | Lotto | Breakopen ticket | Instant lottery | Magic Tombola |
|---|---|---|---|---|---|---|
| 1998: | 37,902.7 | - | 475,053 | 56,208 | 144,828 | 17,894 |
| 1999: | 49,908.7 | - | 745,813 | 54,197 | 158,444 | 35,039 |
| 2000: | 51,148.9 | 77,829 | 870,308 | 36,320 | 208,495 | 24,642 |
| 2001: | 68,369.0 | 206,026 | 1,000,247 | 67,394 | 151,429 | 6,889 |
| 2002 | 56,187.0 | 204,065 | 1,199,762 | 177,597 | 91,647 | - |
| Passive Systems- Lottery |
P.M.U. | Total | |
|---|---|---|---|
| 1998: | 28,733 | 7,922 | 778,112 |
| 1999 | 25,944 | 9,086 | 1,107,407 |
| 2000 | 7,5941 | 8,315 | 1,302,932 |
| 2001 | 8,088 | 8,965 | 1,517,407 |
| 2002 | 24,274 | 10,898 | 1,764,430 |
Traditional Games:
Instant Lottery:
New Game:
Others:
Its retail network has 1,659 points of sales.
Sponsorships are in the following category:
Land Based Casinos:
Website: www.danubecasino.com
Nicolae Sfetcu started some years ago with its own business on Internet, first as a freelancer specialized in web design, translation and Internet marketing and, beginning with last year, he set up his own company, Multimedia SRL. The internet maverick and this year's award winner of the prestigious 'Business Initiative Directions, WQC International Star Award, Gold Category Paris 2003' tells his story in how he started his internet imperium and his internet casino www.danubecasino.com: "The beginning of the history of the Danube Casino can be located long time ago, and it is quite interesting, I think. When I was a student, about twenty years ago, I started to like two games: poker, and bridge. They were very pleasant days those days. During those years I became one of the best specialists in poker and bridge; I have never considered that poker, as well as bridge, are games, because in games you need luck, but for bridge or poker the luck plays a secondary role. I can write many books about the rituals of the nights spent playing these games, with many spectators behind us and that ended every time with a party organized by the winner. It was then when I started not to sleep the nights, and I kept this habit till our days, even if, for different reasons."
"In those years I became one of the first presidents of a bridge club in Romania, but after I graduated from college I finished playing games, too."
"I specialized in Internet business services. So, helped by my previous experience in Internet marketing, and being advantaged by the fact that I know very well the psychology of the gamblers, I had some successful marketing campaign for online casinos and affiliates that want to promote their own sponsored links through their websites or advertisements in my own network. I have to tell you that I developed, in time, one of the most complex Romanian integrated network of Internet resources for advertising and dissemination of information, named Teleactivities Network, that includes thousands of websites, web forums, directories and links, mailing lists and newsletters, e-zines, webrings, a.s.o. After such a marketing campaign, it was one of my customer that gave me the idea to imply more directly in the online gambling worlds. I already had my own gambling portal, www.online-casinos.ro. So I thought of starting my own online casino Danube Casino. Why this name? Because all my life I enjoyed the neighborhood of Danube and its beautiful landscapes. You can consider this name as an act of fealty for this river (I dedicated it a whole section in my website for the county where I live, Mehedinti".
The first Romanian online casino was launched on June 25th, 2003. Danube Casino has as partner Windows Casino, one of the top 10 online casinos in the world, legally licensed and fully insured, certified by Safe Bet and approved by Electronic Gaming Commission. Windows Casino is the winner of numerous international prizes, including Online Gaming Awards 2002, for: Best Video Poker, Best Blackjack, Fairest Casino, Best Promotions, Best Online Casino.
Danube Casino offers over 125 different games (roulette, blackjack, poker, slots, video poker, baccarat, craps, etc.), according to the European and American standards. The gamblers have the possibility, besides the regular prizes, to obtain extra prizes, too, consisting in a trip to Monte Carlo, a brand new Ferrari, or other promotional materials.
In order to be able to play online, first, a deposit in the casino count has to be made. All transactions are in USD. Payments can be made either by credit cards, or through specialized services for the online processing of the money (NETeller, Firepay, Stormpay, Western Union, etc.).
The gamblers that reach the Danube Casino site have the possibility to be informed on the best game ways and strategies, but also learn the rules of the games by appealing to the casino games guides. Multimedia SRL and Windows Casino assure the technical support 24 hours a day, 7 days a week.
There are specific Romanian laws for gambling, however none makes special references to online gambling.