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The deadline for the payment of the second installment of the € 500 million gaming contribution by VLT licensees/concessionaires expired, but only one third of the amount due was paid to AAMS.
What is the € 500 million gaming contribution?
The 2015 Italian budget law had required AWP and VLT licensees to pay – in addition to the usual gaming taxes – a € 500 million contribution to be allocated on the basis of the number of AWP/VLTs installed at the end of 2014. And – but this is a matter of major disputes – the so called “entities of the supply chain” had to contribute to the payment of that amount.
The first installment of the contribution of € 200 million was already paid earlier this year, but the second installment of € 300 million was due at the end of October 2015.
What happened with the € 300 million installment?
Apparently VLT licensees refused to pay the whole amount and paid only € 105 million which was the amount that they were able to collect from the “entities of the supply chain” while led to a potential massive loss for the State.
As provided by the law, some licensees reported to the Italian gaming regulator the names of the entities which had refused to contribute and criminal proceedings “might” be started against them. But given the very large amount involved
- It is unlikely that it will be recovered in full and
- Such precedent shows the weaknesses of this solutions.
The contribution is excessive and unjustified and does not take into account that VLT licensees were awarded with a 9 year license when the gaming taxes were much lower and no additional contribution was due. Also, the contribution is based on the mere number of machines without considering their profitability which is at least questionable.
What is going to happen now?
The Parliament is working on the 2016 budget law (the so called “legge di stabilita’“) which already provides for an increase in the taxation for AWPs and VLTs. The VLT licensees sent a warning to the Government requiring the removal of the additional € 500 million gaming contribution, but the current version of the draft budget law does not provide for that at the moment.
At the same time the Administrative Supreme Court had rejected the claim from licensees for the suspension of the payment order in relation to the contribution as part of an interim proceeding since no potential “irreparable damages” had been identified. But a new hearing will take place on the 24th of November 2015.
Hopefully the Parliament will be happy with the new tax increase and remove the additional gaming contribution. The budget law has to be approved by the end of the year and therefore we will know the future developments shortly.
