Italian government proposes major gaming market expansion in 2016

The Italian online gaming market could be swelled by up to 120 new entrants next year, while the country’s licensed land-based gaming venues will also see major changes under draft budget law proposals introduced by the government.

The draft budget law provides for the award of new iGaming, bingo hall and betting shop licences, and also proposes changes to the taxes paid on amusement with prizes (AWP) and video lottery terminals (VLTs). In addition, new controls are to be introduced for internet cafes acting as betting parlours (CTDs).

The proposals will see the country’s online gaming market expand with 120 new licences to be awarded through a procedure to be launched on July 31st next year. The licences will last for six years until December 31st 2022, with each to cost €200,000.

This will be complemented with an additional 10,000 betting shop licences at an initial bidding price of €32,000, and 5,000 licences for betting corner kiosks at an initial price of €18,000. While the shop licences cover venues whose main activity is betting and gaming, the corner licences cover shops such as tobacconists that operate a desk dedicated to betting.

These licences will last for nine years, with the procedure to award the new licences beginning on May 1st 2016, ending on July 31st.

The bingo market will also grow under the new proposals, with 250 land-based licences to be awarded for a price of €350,000 each. While this is not accompanied by new regulations for the sector, lawyer Giulio Coraggio of DLA Piper said that it is hoped that new legislation will be introduced to coincide with the expansion of the market.

While they were originally illegal, CTDs were given the opportunity to become legitimate by applying to be authorised until the end of the current betting shop licence term of June 30th 2016. This process has now been reopened to encourage others active in the sector to ensure they are operating on the right side of the law.

Those that fail to do so will face new sanctions, with financial institutions to deduct an amount equal to 25 per cent of each transaction processed by CTDs. This is based on the fact that foreign operators maintaining a CTD network have effectively created a permanent establishment in Italy, and therefore can be taxed on all income.

Finally new taxes will be introduced for AWPs and VLTs. Taxation of the former will be increased to 15 per cent of turnover, while the latter be taxed at 5.5 per cent of turnover.

However, Coraggio notes, it is unclear whether the need for concessionaries to make a guaranteed contribution of €500m, set out in the 2014 budget law – introduced instead of raising taxes for gaming machines – will be retained.

To keep this contribution guarantee would “not make any sense,” he said.

“This is certainly the provision that will lead to the more difficult debates also because the taxation on machines has already been considerably increased in the past," added Coraggio.

As the first draft of the Budget Law, this is subject to changes before it is finalised by the end of the year.


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