Italian betting shop licenses: a new tender or an extension?

The delays of the tender for new Italian betting shop licenses might be sorted with an extension of current licenses which could lead to major legal issues.

The current situation on new Italian betting shop licenses

The Italian budget law 2016 provided for the award of

  • 10,000 betting shop licenses at an initial bidding price of EUR 32,000 and
  • 5,000 betting corner licenses at an initial bidding price of EUR 18,000

by mid-2016 and the first insights on the possible terms of the tender were published a few months ago.

However, such tender was subject to the achievement of an agreement between the Government and the municipalities on the location of gaming halls/betting shops and their time of operation. Indeed, at the moment each municipality has its own rules which the business of companies investing in the sector quite uncertain.

The latest proposal of the Government on the agreement with municipalities

According to the press, the latest proposal of the Government aimed at finding a solution with the municipalities provides for

  1. The removal by 31 December 2017 of the gaming offering from restaurants, hotels, shops and beach resorts, while AWPs could be removed from tobacco shops and bars over the course of a 3 year period, save for those tobacco shops and bars able to obtain a special certification;
  2. The commitment of the Government to submit to the Parliament the proposal for a reduction of the number of AWPs by 30% by 31 December 2017 and
  3. The setting up of a special certification for gaming halls/betting shops which will provide, among others, the full traceability of winnings and would enable such gaming halls/betting shops to be exempt from complying with the restrictions imposed by municipalities on the minimum distance from sensitive locations.

The potential “plan B” of the Government and its legal concerns

If the solution mentioned above is not deemed acceptable by local municipalities, one of the options that the Government is considering is to cancel the tender and just extend, subject to the payment of a fixed one-off fee, the current betting shop licenses.

This would be a good solution for the current holders of betting shop licenses since they will not face the risk of losing their license as part of the bidding process of the tender. However, this means that

  • There could not be new entrants in the market and
  • Operators willing to increase their market share would be prevented from doing it.

The above would considerably increase the risk of potential legal challenges and indeed the Government declared that this is “apparently” no longer an option.

However, it is a matter of fact that also the current delays might be considered a reason of potential legal challenges that cannot be ignored by the Government. Operators that based their Italian business on the argument that they have been “discriminated” during previous tenders might see their position reinforced by such delays that risk to legitimate a continuation of their current business run without an Italian betting shop license. At the same time, the Italian Government is quite unstable and not sufficiently strong to impose its decision to the municipalities.

We will see the developments of a situation that is definitely becoming embarrassing.

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Giulio Coraggio

I am the head of the Italian Technology sector and the global 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 clients' success.

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