New Italian gambling taxes set to impact operators in 2019

The Italian government has increased gambling taxes in its 2019 budget, prompting earnings warnings from Italian facing gaming companies.

Playtech said that the tax increases contained in the 2019 budget are expected to negatively impact adjusted EBITDA by €20-€25m next year, excluding any mitigating actions.

Playtech shares were trading down 6.34 per cent on the news Monday morning following the Italian Senate’s approval of the budget.

This will see the online gaming tax rate rise from 20 to 25 per cent, with online sports betting tax climbing by two percentage points to 24 per cent. Virtual sports tax rises by the same amount to 22 per cent, while retails sports betting tax climbs to 20 per cent.

The new tax rates will come into force on January 1st, 2019, and will be accompanied by lower mandated payout rates for AWP and VLT machines. 

Milan-listed gaming operator Gamenet Group said that it expects the new rates to reduce its 2019 EBITDA by €15-€20m, which it will seek to offset as far as possible against adjustments to the payout ratio on AWPs and VLTs.

Shares in Playtech plc. (LSE:PTEC) were trading down 6.34 per cent at 372.50 pence per share in London Monday morning, setting a new 52-week low of 369.47 per share in the process.

Shares in Gamenet Group SpA (MIL:GAME) were trading down 3.16 per cent at €7.06 per share in Milan Monday morning, above their 52-week low of €6.62 per share set on December 20th.

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