Below is an article by the lawyer Julius Courage (in the photo), partner and location head of the Intellectual Property & Technology department of the law firm DLA Piper in Italy, published on ufficioaldigitale.com:
“The future remote gaming market in Italy could undergo significant changes that could reshape its landscape, potentially transforming it into an exclusive opportunity for a few operators, with daunting barriers to entry and unprecedented tax increases.
Potential increase in the cost of remote gaming concessions and its consequences
At the end of 2024, all online gaming concessions will expire. Therefore, a tender for the assignment of new concessions should be announced in the coming months. The terms of this race are uncertain. The current law provides for a tender with a minimum price of 2,5 million euros instead of the 350.000 euros of previous tenders. However, the Ministry of Finance wants to make the tender even more expensive by increasing the minimum bid price to 6 million euros.
They will cover all remote games, from sports betting to poker, from casinos to bingo, with the exception of scratch cards and number games, for which license holders will be able to become resellers. But the price remains extremely high when compared to previous tenders. There's also no indication that the game's advertising ban will change its terms.
According to initial estimates from the Ministry of Finance, this measure should attract a maximum of 40 operators, generating revenues of around 240 million euros.
The potential increase in tax on remote sports betting
In addition to the above measures, a potential increase in the tax on online betting is being considered, which could go from 22% to 26% of GGR, to guarantee an additional revenue of 70 million euros.
This move will put a strain on struggling Italian bookmakers, forcing them to adjust betting odds, thus offering less competitive odds despite fierce competition from .COM bookmakers who benefit from significantly lower tax burdens, such as Malta's only 5% on the GGR .
Regulation of Top-up Sales Points (PVR)
A "regularization" of the Top-up Sales Points (PVR) for betting is also envisaged. These shops, including internet cafés, only sell top-up cards for online gaming platforms, but in some cases are operated as actual betting shops. It is estimated that there are around 70.000 across the country.
The Ministry of Finance plans to impose a tax of 200 to 700 euros on PVR operators to continue their activities, expecting a revenue of around 35 million euros.
The impact on the future remote gaming market in Italy
The increase in the prices of remote gaming concessions and the tax rate on sports betting, together with the ban on gambling advertising, could result in a significant barrier to entry into the market and could force several operators to manage the its business illegally under a foreign license or to cease its activities. In fact, estimates from the Ministry of Finance indicate that more than half of the current operators will not participate in the new tender.
While these measures will undoubtedly strengthen the larger operators due to the reduction of local competition, they could inadvertently promote the growth of the market of operators without an Italian concession. Some operators may resort to mergers, acquisitions or even becoming “skins” linked to other license holders. In fact, the current Italian licensing regime allows an operator to operate an unlimited number of skins under their license, as long as players do not have more than one account per license. However, as skins are not licensed and their operators are not subject to KYC checks, it will be harder to track them unless a tougher regime is introduced for them too.
The remote gaming market in Italy is at a crossroads with great opportunities and threats. Hopefully, political forces understand that they cannot ruin all the efforts made over the last 20 years to create a thriving and legal market.
On a similar topic, you can read the following article: “Is a revolutionary reform of the gambling sector on the way?"".
