The Italian government has finally moved to scrap the country’s turnover-based tax rates for sports betting and bingo in favour of a model based on gross gaming revenue (GGR), while also proposing a tax hike for amusement with prizes (AWP) machines.
A new draft law proposes a number of changes, most notably looking to ease the tax burden on operators that have struggled with the hefty turnover tax imposed on sports and bingo.
It aims to tax land-based sports betting at 18 per cent of GGR, and impose a reasonably high tax of 22 per cent of online sportsbook GGR, instead of the current 3.5 per cent tax on turnover. This is higher than the 15 per cent paid by UK operators and the 20 per cent of GGR charged in Denmark.
A 20 per cent GGR tax will also be introduced for bingo instead of the existing 11.5 per cent turnover tax. Should the draft law pass into law the new tax regime is to come into force from January 1st 2017.
The draft law also confirms that the €500m minimum contribution for gaming machine concessionaries is to be removed in 2016. In its previous version the draft law increased AWP taxes to 15 per cent of turnover and taxed video lottery terminals (VLTs) at 5.5 per cent of turnover. AWPs will now be taxed at 17.5 per cent of turnover, with the minimum payout rate lowered to 70 per cent.
These changes have been introduced as part of a major expansion of the Italian gaming market, first announced in November, which could see up to 120 new iGaming operators secure licences in the country. The number of betting shops will be increased by up to 10,000, with 5,000 additional betting kiosks licensed. Land-based bingo will also grow with an additional 250 venues to be licensed.
The market’s growth will be supported by new gaming advertising legislation, also set out in the draft law. These new regulations will comply with the same principles already established in self-regulatory controls.
No gaming advertising will be allowed from 7am to 10pm during non-sporting TV and radio programmes – a control that is criticised by DLA Piper’s Giulio Coraggio.
“This is a mistake by the legislator since media laws provide for ‘generic’ channels rather than programmes,” he said. “The law should also provide for the exclusion of the prohibition in the case of sporting events.”
The government will also look to resolve uncertainty over the rules that establish where betting shops, bingo halls and gaming venues can be located. This uncertainty could potentially jeopardise the tender process for the new land-based licences, prompting discussions with regions and municipalities that should be finalised by April 30th 2016.
While all these changes are still only being proposed as part of draft amendments to the Italian budget law, the final law must be adopted before the end of the year. As a result, Coraggio says, these changes are likely to be adopted.