Italy's proposed new fees for online gaming licenses will be the highest in the EU and will worsen the country's online gambling black market problem
The European Gaming and Betting Association (EGBA) is seriously concerned about the proposal of the new Italian decree on online gambling, currently under discussion in the Council of Ministers. The decree includes provisions that would introduce a significant reorganization of the sector, in particular regarding the cost of licensing fees. The possible introduction of (nearly) prohibitive licensing regimes and taxes also raises concerns about compliance with EU law, which will deserve consideration.
Recent news suggests that the decree will establish an unprecedented license fee from 7 million euros, far surpassing other EU member states.
EGBA believes that such a substantial increase in the cost of the license is unjustified, particularly when compared to previous procurements of licenses for online gambling operations. The proposal represents a 35-fold increase compared to the 2018 license fee of €200.000 and triples the Italian authorities' previous license fee proposal of €2,5 million, which was never implemented.
The EGBA emphasizes that this significant increase in license fees will have serious consequences. The high tariff will discourage new market entrants and will likely force existing licensees, especially smaller operators, out of the market. This, EGBA believes, will lead to a drastic cut in the number of licensed operators from the current 91 licensees to just 15-20, contributing to a significant increase in the size of the country's online gambling black market, posing legacy risks for the player protection.
The Italian online gambling black market is already one of the largest in Europe, worth over €1 billion a year and the proposed payout will make this situation worse, not better, with serious implications for protection of Italian players.
The anticipated revenues of the proposed licenses, even in the most optimistic scenario, range between 105 and 140 million euros for the Italian state. The EGBA suggests that implementing the current unused tender proposal of €2,5 million, without the previously suggested limiting factors of 40 licensees and an auction mechanism, could produce similar or higher tax revenue without significantly damaging market competitiveness.
The primary objective of the Italian gambling regulation should be to protect players and promote a fair and competitive market environment and, therefore, the EGBA urgently calls on the Council of Ministers to reconsider the proposal for a punitive tax increase of license. By limiting competition to only a few operators and inadvertently strengthening the size of the black market, the proposal risks undermining player protection.
EGBA is committed to working with the Italian authorities to develop a licensing fee framework that supports a well-regulated and sustainable online gambling market, prioritizing player protection and ensuring a level playing field for all operators. The current advertising ban, currently exploited by black market operators, should be lifted.
“The proposed increase in license fees is unprecedented and unheard of, it would make Italy the most expensive country in Europe to obtain an online gambling license. Together with other restrictions in its gambling market, such as a ban on advertising, this proposed tax increase will make Italy a closed market for new market entrants and lead to an exodus of existing licensees. This also raises concerns regarding compliance with EU law. We urge the Cabinet to reconsider the proposal, as it will make the country's online black market gambling problem worse, not better."he said Maarten Haijer (in the picture), EGBA General Secretary.
