Online gambling, the new EU tax target?

Victor Negrescu, vice-president of the European Parliament, wants the European Union to introduce a European-wide tax on the profits of companies in the online betting and gambling industry, and for the money to be explicitly directed towards education, skills training and youth policies, at a time when Brussels is desperately looking for new sources of funding, and many of the ideas put on the table could end up directly affecting Romania.

In a post on his official Facebook page, Victor Negrescu states: "Europe does not have enough financial resources for current needs, including Romania's. Many of the proposals discussed for generating additional income would directly affect us as a country. That is why, with the support of the European Social Democrats, we have proposed a viable alternative to finance education and youth policies: taxing companies in the online betting and gambling industry at European level.

Moreover, together with the European Parliament's intergroup on education, we have proposed an amendment, signed by over 20 MEPs, by which we request that 20% of the future long-term European budget go towards education and skills training.”

The Vice-President of the European Parliament explicitly invoked the fact that the taxation of profits varies massively in the EU, from approximately 5% in Malta to almost 40% in Austria, and this asymmetry distorts competition and pushes part of the industry towards "friendly” jurisdictions, from where it sells services throughout Europe, including Romania.

According to Victor Negrescu's statements to Agerpres, there is an assessment carried out by the European Parliament's research structure, at his request, which shows that the industry had a turnover of 130 billion euros in 2022, and "most likely" today we are talking about almost 200 billion euros, on an annual growth trend of at least 5%. In this picture, a European tax, even at an initial level of 1%, as is the proposal advanced as a starting point, could generate, according to Mr. Negrescu, "tens of billions" to the common budget, without being a direct blow to the consumer or to national budgets.

In parallel, market data shows how large the online component of the phenomenon is and how quickly it is expanding. The European Gaming and Betting Association indicates revenues from online gambling in Europe of 47.9 billion euros in 2024. If we put this figure next to the estimate invoked by Victor Negrescu regarding the order of magnitude of the industry and next to the reality that operators are, by definition, cross-border, the conclusion becomes difficult to avoid: the EU has an integrated market in practice, but a fragmented fiscal and control framework, which creates unfair competition, leaves room for evasion and causes a relevant part of the money to leave the European space, while the states manage the side effects, from addiction to insufficient protection of minors. The Vice-President of the European Parliament builds his argument precisely on this fracture: if Europe wants money for real priorities, such as education, skills and youth, then the most honest solution is not to invent yet another tax that would affect Romania as well, but to take a slice of the profits of an industry that benefits massively from the single market, but which does not return proportional value to the European project. In his logic, it is not just about revenues, but also about order: clear European rules, combating illegal activities, a common mechanism for additional taxation based on companies' profits and an explicit budgetary destination, which would transform the tax on online gambling into a tax for education, with funding directed towards schools, training, digital skills and prevention.