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Friday, August 14, 2009
Clearer rules, higher sanctions and new opportunities

The rules governing the gaming sector so far were an incredible amount of different rules which were never enough clear making the legal boundaries of the gaming sector sometimes uncertain. The recent coming into force of the so called Community Law 2008 made the playfield much more attractive for gaming operators.

Through this law, the Italian Parliament (i) set forth the requirements for new operators to obtain an online Italian gaming license which will not be subject anymore to the performance of calls for tenders; (ii) expressly listed the most relevant clauses which gaming account agreements to be entered with players have to contain and (iii) more importantly raised up to 3 years of imprisonment the sanctions for operators offering their games to Italian residents without an Italian gaming license.

These new rules will make the life of operators much easier and the introduction of criminal sanctions for unlawful operators will better protect the interest of licence holders. Finally, the law prescribed that companies holding an offline or online gaming license will be entitled to run also offline poker tournaments which shall comply with the rules that the Ministry of the Economy will shortly issue so giving an additional business opportunity for gaming operators.
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Time to enter into the Italian Gaming Market

It seems that the Italian Government has understood the enormous potentialities of the gaming market. Following the recent earthquake in the centre of Italy, as part of plan aimed at collecting funds for the rebuilding of the destroyed areas, it has been issued a decree empowering the Italian gaming authority to regulate, among others, online poker cash games and fixed odd betting with direct interaction between players.

Indeed, as far as online poker games are concerned, licensed operators could only run so far poker tournaments and solitaire which were launched at the end of last year and were the very hot games of the Italian winter with new operators trying to attract more and more players offering incredibly high jackpots.

The specific rules governing such games have not been set up yet and this gives an additional opportunity for new operators which may enter into the market and liaise with the Italian gaming authority in the drafting of such rules to better meet operators' needs.
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Friday, August 7, 2009
Launch of online bingo

The Italian gaming authority (AAMS) has just issued the regulations governing the online bingo. The operators holding an offline bingo license will be merely required to go through an authorisation process which is subject to the fulfilment of some technical requirements and the provision of bank guarantees to obtain the right to offer online bingo to Italian residents.
The price of each bingo card shall vary between € 0.10 and € 5.00 and will be determined by the licensee with reference to each game. Also, the decrees of the AAMS governing the bingo game require that 58% of the amount collected from the sale of the cards is converted in prizes, while the tax burden is equal to 20% of the amount collected from players.
According to the information provided by the AAMS, the monthly amount collected during the last months through offline bingo ranges between € 110 and 140 million. This amount is likely to considerably increase following the launch of online bingo as the access to the game will be much more convenient for players.
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Ladbrokes puts up on sale its Italian betting shops

The Times Online reports that Ladbrokes, the English bookmaker, has decided to put on sale its 170 Italian betting shops for an estimated £ 50 million. According to the Times Online, the main reason of this decision is that "the continued presence of illegal shops, increased competition and the withdrawal of the protective distance rule". Indeed, a number of operators are currently putting pressure on the Italian gaming authority (the AAMS) to adopt more stringent measures against unlawful gaming to protect their investments.

I agree that this is a very relevant issue, but as already reported (see Action Plan against Unlawful Gaming), a law empowering the AAMS to implement an action plan aimed at substantially limit unlawful gaming has been recently passed showing that both the Italian Parliament and the AAMS will be in the next future more aggressive against unlawful gaming. This is also confirmed by the recent introduction of criminal penalties up to 3 years of imprisonment for the provision online or offline of gaming, betting and gambling activities to the benefit of Italian residents without an Italian gaming license.

We will see shortly whether the AAMS will win the battle against unlawful gaming.
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Tuesday, August 4, 2009
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Life is becoming more and more difficult for gaming and gambling providers in Italy. Indeed, the Parliament has recently approved a law prescribing the implementation of an action plan against unlawful gaming especially in the online sector.

This measure follows the coming into force of a law introducing criminal sanctions up to 3 years of imprisonment for the provision online or offline of gaming, betting and gambling activities to the benefit of Italian residents without an Italian gaming license. Indeed, Italian law prescribes that only providers (wherever located) holding an Italian gaming license issued by the Italian gaming authority can offer gaming and betting services to Italian residents.

However, this statutory obligation is difficult to implement in the online world since websites are accessible from any part of the world and Italian authorities are unable to prosecute companies located for instance in Gibilterre, BVI or any other far-reaching place. To this purpose, back in 2007 the Italian gaming authority obliged Italian access providers to implement filters blocking the access of Italian residents to a sort of black-list gaming websites i.e. a list of websites operating without an Italian gaming license which is continuously updated by the Italian gaming authority.

Italian authorities expect that following the coming into force of the abovementioned laws more and more gaming providers decide to abide with Italian gaming laws.
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Videolottery: the finish line is closer!

The Italian Senate has just passed a new law that further regulates the always closer launch of the so called "Videolottery" (VLT) i.e. video terminals to be placed in gaming halls and that will randomly generate winning combinations.

The new law prescribes that - up to the expire of the current network licenses concerning the so called NewSlots (a type of legalised slot machines) - the network licenses for VLTs will be assigned to the current NewSlot licensees which will require the extension of their license by November 20, 2009 AND to other operators selected by the Italian gaming authority (AAMS) which shall fulfill the same conditions required to the current licensees.

This measure is clearly aimed at allowing the immediate opening of the VLT's market to new operators, including foreign operators. Indeed, the goal of the current NewSlot licensees was to be the exclusive network licensees for NewSlots and VLTs up to the expire of their licenses (expected at the end of 2010) so that they could gain a competitive advantage compared to new operators which will subsequently enter into the market.

It will be interesting to see whether major foreign operators will decide to enter into the Italian market following this legislative development.
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Monday, August 3, 2009
Corporate Liability of ISPs in Italy

As part of a project aimed at fostering the development and internationalisation of the companies, the Italian Parliament has recently passed a law prescribing, among others, the corporate liability for copyright related crimes.
Indeed, Italian copyright law already prescribed criminal sanctions for the provision to the public on communications networks of copyright protected works (e.g. through P2P networks) and for the copying and publication of films and television programs (e.g. on video hosting websites) in breach of copyright owners' rights, but such sanctions could be enforced only against the natural persons responsible for the unlawful conduct (e.g. the director managing the department responsible for the conduct). Following the coming into force of the new law, also the company itself can now face sanctions up to € 775,000.
Given the uncertainty of recent laws on the liability of ISPs, this law might be a relevant change for them and this change is considerable also for foreign ISPs in case of copyright breaches performed by their Italian customer. Italian courts might consider that the crime took place in Italy and therefore Italian criminal laws are applicable also against a foreign ISP despite of the fact that it does not have any equipment located in Italy.
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Sunday, August 2, 2009
Developments in the Italian Gaming and Betting Market

The Italian gaming market will see considerable changes within the next 6 to 12 months. The coming into force of laws introducing new types of games and the so called videolotteries (VLT) seems to have considerably increased the potentialities of the Italian online and offline gaming market.
Also, a new law recently empowered the AAMS (the Italian Gambling Authority) to regulate offline poker which so far was subject to restrictions varying from a municipality to the other. Therefore, operators will be able in the recent future to run gaming halls where not only VLTs and NewSlots can be placed, but also they can run poker tournaments, place Totems for online poker and open betting shops!
In my view, this is an incredible opportunity for operators which obviously will require substantial investments that however are likely to lead to considerable revenues. In this context, the Italian government is carrying out a sort of a "low tax policy" to encourage investments in the gaming sector. The decree on VLTs in fact prescribes that the maximum tax levied on VLT plays will be 4% with the possibility though for the AAMS to set lower tax rates during the start up period of the VLTs' market.
The scenario governing VLTs will be more clear in the next future after the issuing by the AAMS of the decrees setting forth the specific rules governing such amusement machines, but the position currently taken by the Italian government appears to set a great playfield for new operators.
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