The Italian gaming revolution in 5 changes

The recent regulatory changes made the expectations for 2016 in the Italian gaming market even bigger, but who will exploit them? 

Updated on 15.08.2016

The approval of the Italian budget law (the so called Stability Law) by the Italian Parliament set the ground for a “revolution” that is passing through these 5 top changes:

1. VLTs and AWPs – higher taxes, but easier certification and more certainty

The taxation on video lotteries has now been increased up to 5.5% of the turnover, while the taxation on AWPs (the so called comma 6a) has been increased to 17.5% with a lowering of the minimum payout to 70%. These changes have been accompanied by the removal of the € 500 million contribution that had led to major disputes.

At the same time, an easier certification process has now been introduced for video lotteries since – as it occurs with online games – this process can now been handled by private companies. This will facilitate the access to the market by new game suppliers.

Also, the Government committed to find an agreement with the regions and the municipalities as to the features and the location of gaming halls by 30 April 2016. The goal is to avoid the current inconsistency in the country.

2. Online games – new gaming licenses and switch to GGR tax

A tendering process for the award of 120 new online gaming and betting licenses will be launched by 31 July 2016. The licenses will last up to 31 December 2022, their price will be of € 200,000 and the tendering rules are expected to be similar to the ones of previous tendering processes.

The taxation will change with effect from 1 January 2016 for

  • online sports betting to 22% of the GGR and
  • skill games, including poker tournament and fantasy sport games, to 20% of the GGR.

The taxation for online bingo will also change to 20% of the GGR with effect from 1 January 2017.

3. Land based betting – betting shop licenses, switch to GGR tax and last chance for CTDs

All the betting shop licenses as well as the current authorizations for cured” CTDs will expire in June 2016 and for this reason a tendering process shall be launched by the end of 2016 for the award of

  • 10,000 betting shop licenses against an initial bidding price of € 32,000 and
  • 5,000 corner shop licenses against an initial bidding price of € 18,000.

And these licenses will be awarded following the change (effective from 1 January 2016) of the taxation for land based sports betting to 18% of the GGR.

This happens when a last chance is given to CTDs to “cure” their position adhering by 31 January 2016 to the same procedure launched last year with the possibility to pay discounted back dated taxes and being authorized to operate. On the contrary, stricter rules have been introduced to qualify as a tax permanent establishment in Italy the entities that run a network of CTDs and higher sanctions have been introduced against gaming terminals placed in shops and connected to online gaming websites (the so called “totem).

4. Stricter gaming advertising rules

Advertising of games with cash winnings will be prohibited during “generic” programs from 7 am to 10 pm and shall comply with rules similar to those already provided by self-advertising regulations with sanctions up to € 500,000. The terminology used in the law with the reference to “generic programs” has now been clarified.

Also, the above rules have been coupled with a recent more stringent approach by the advertising self-regulatory authority against gaming advertising which in my view will remain the most relevant and effective obstacle to gaming advertising.

5. Launch of Lotto tender

The € 700 million lotto tender was launched and the license has been awarded to a consortium led by IGT.

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Giulio Coraggio

I am the location head of the Italian Intellectual Property & Technology department and the global co-head of the IoT and Gaming and Gambling groups at the world-leading law firm DLA Piper. IoT and artificial intelligence influencer and FinTech and blockchain expert, finding solutions to what's next for our client's success.

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