Can you afford to lose € 71 million of revenues a year? This is the likely thought of Italian major TV companies after having read about the approval by the Senate of a gaming law named “delega fiscale law” providing a potential gambling advertising ban during TV and radio programs.
The bill that still needs to be approached by the second chamber of the Parliament refers to:
“an introduction of an advertising ban during radio and TV programs in compliance of the principles prescribed by European authorities on the protection of minors with reference to games with cash winnings that can induce to compulsive behaviors“.
This provision generated concerns from both TV companies that in 2012 gained € 71 million of revenues from TV gambling advertising and gambling operators themselves that look at TV advertising as the most effective tool to market their platforms.
However, lots of discussions on the matter lacked of sufficient background information and led some operators to even think whether they had to immediately rearrange their marketing strategy. Indeed, it is good to mention that the “delega fiscale law” in the process to be approved will NOT introduce any provision directly enforceable towards the public. On the contrary, it will merely empower the Government to adopt in the following 12 months measures based on the principles set forth by the Parliament and such principles might include the provision referred above.
The Government will have a broad discretion in implementing such principles and in this respect the reference in the provision above to “the principles prescribed by European authorities on the protection of minors” is likely to lead to restrictions of TV/radio gambling advertising during specific time slots as already prescribed in many other jurisdictions and even in Italy as gambling advertisements cannot be broadcast during the 30 minutes before and after TV programs addressed to minors.
The above conclusion is even more likely if it is considered that the Italian gaming license regime prescribes that the State through the Italian gambling regulator grants a license (the so called “concession”) awarding a “right” and an “obligation” to offer games during the license term against the payment of an amount that in the case of land-based AWP and VLT licenses is very high. As a consequence, a restriction on TV and radio gambling advertising subsequent to the issue of gambling licenses and to the payment of the relative price might lead to claims from operators that Italy cannot afford at the moment.
Given the above, I do not expect considerable changes in the gambling advertising sector. On the contrary the “delega fiscale law” will be a major opportunity to set up of a new tax regime for most of the games which hopefully will lead to a GGR based tax regime for sportsbetting that is subject of considerable debates at the moment.
Therefore I have very large expectations for the future rather than concerns also because the entire gambling sector generates tax entries of around € 10 bn a year and I wonder which Government can afford such loss during the current economic crisis.