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It’s a very exciting time in the Italian gaming market with the recent and upcoming regulatory changes accompanied with the new licenses that might lead to an earthquake in the market.
What happened in the first months of 2016?
The new year started with a new tax regime for sportsbetting and poker tournaments. Both games switched from a turnover based tax regime to a GGR tax regime. In particular, sportsbetting is now benefiting from an 18% GGR tax regime in case of land based sportsbetting and 22% GGR tax regime in relation to online sportsbetting. At the same time, poker tournament, skill games, fantasy sports and eSports are now subject to a 20% GGR tax regime.
Such changes were accompanied by the completion of the full liberalization of the sportsbetting liberalization. Operators are no longer dependent on the schedule of bets/events published by the regulator and on the receipt of the results of the bets from the IT provider of the regulator, Sogei.
The Italian sportsbetting offering is now aligned with the .COM offering, with the sole peculiarities that the bets/events need to be previously approved by the regulator and results have to be notified to the servers of the Italian gaming authority.
These changes resulted in major financial results as Italian licensed online operators reported total sports wagers of € 970 million in Q1 2016.
Finally, the Lotto tender which was expected to be a battle for the Lottomatica’s throne ended with the same status quo. A consortium led by Lottomatica was the sole bidder and therefore the beneficiary of the awarded license.
What will happen now?
The second quarter of the year started with a major action by the Italian police against the unlicensed market. This action, followed the judicial earthquake already occurred last year, might convince some operators to obtain an Italian online gaming license.
And the timing is favorable since by mid of 2016, the Italian gaming regulator is expected to award 15,000 betting shop and corner shop licenses and 120 online gaming licenses. In particular, for what concerns the land-based gaming market all the current licenses will expire and a bidding process for new licenses will be launched, while around 40 online gaming licenses will expire which means that there will be room for at least 80 new entrants in the market.
Additionally, regulations on bets on virtual events and bingo will substantially change in the next months, introducing much more flexibility for operators in the offering of the games, removing some regulatory restrictions that appeared unjustified. Also, with effect from 1 January 2017, the taxation on online bingo will switch to 20% of the GGR.
The conditions are favorable in the market, we will see who is going to be able to better exploit the opportunity.
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