Italian online gaming licenses – Here are the updated FAQs!

With the upcoming tender of new Italian online gaming licenses, I decided to publish an updated version of the FAQs on the regime applicable to Italian online betting and gambling licenses. 

The Italian gaming regulator will award 120 new online gaming licenses by the end of 2017. Below is an outline of the requirements that are likely to apply to those licenses based on the regime currently in place. Minor changes might result as a consequence of the publication of the rules of award of the gaming licenses:

Q. Why do I need an Italian gaming license to enter into the Italian market? My company already holds a foreign license, what are the benefits of an Italian license?

The offering of games to Italian residents without an Italian online gaming license is subject to criminal sanctions and tax penalties.  The current strategy of the Government is to challenge to unlicensed operators the lack of payment of taxes as a more effective tool against what is usually called the “black market“.  Also, more stringent sanctions have been introduced against CTDs i.e. internet cafes operated as betting shops on the basis of a foreign online license that have not joined the cure procedure that was available up to January 2016.

Q. Do I need that my company is established in Italy or that the servers are located in Italy to apply for an Italian license?

No, license holders, their servers and personnel can be located in any country of the European Economic Area.  On the contrary, it will not be possible to keep the company and the infrastructure in non-EU countries like Alderney and the Isle of Man. In relation to the UK and Gibraltar, companies will be able to apply for an Italian remote gaming license, but might be obliged to relocate to an EU country as a consequence of the Brexit.

The possibility to locate the entity holding the license abroad triggers considerable tax savings as the operator shall pay only Italian gaming taxes, while it shall not pay Italian corporate taxes.  Also, the scenario is interesting for operators that currently hold the Italian gaming license through an Italian entity as they might relocate the company abroad even though this will require to comply with the so called “exit tax” regime.

Q. Ok, can I apply for online gaming licenses NOW? What is the price?

Unfortunately the answer is not yet! However, 120 new online gaming licenses will be made available by the end of 2017.

Q. I want to apply for a casino license and a sportsbetting license, what is the price?

There is no separate license for casino, sportsbetting or poker. Entities applying for an Italian remote gaming license will be awarded with an “umbrella” license covering all the regulated games. The offering will be then subject to a technical approval process that is different depending on the type of game involved.

Licenses will be awarded on the basis of the “first come first serve” with not bidding process, but a fixed one-off price of € 200,000 for a license lasting up to the end of 2021.

Q. My Italian gaming license expired in June 2016, what shall I do?

Companies whose license will expire in June 2016 shall apply for a new license as new entrants in the market. Also, it is likely that they will have to re-submit all the documents relating to their company even if the regulator already has them. Therefore they shall start arranging them.

However, provided that they submit the application for the renewal of the license before the expiry of their license, they will be entitled to continue operating even if the license is subsequently awarded.

Q. Ok, why shall I enter into the Italian gaming market?

Italy is the largest gaming market in Europe, and the full liberalization of sportsbetting and the upcoming new rules on sportsbetting go to complete the full offering of the Italian gaming market that already includes casino games (including slot games), poker, bingo, betting exchange, horsebetting and bets on virtual events. Additionally, the opportunities granted by eSports and fantasy gaming are making the market even more attractive.

Q. But Italian gaming licenses are only to target Italian players, how can it be profitable?

This might not last for a long period of time. The deal executed by the French, Portuguese, Spanish and Italian online gaming regulators on online poker international sharing liquidity might open the door also to other games in the short term. Also regulations on online poker tournament are the same applicable daily fantasy sports for which international liquidity is crucial.

Q. Let’s speak about technical issues, I have heard that operators have to comply with stringent technical requirements

This is true, but especially in case of casino games the problem can be overcome using the platform and games that the software provider has already certified.  Also, the technical approval process required by AAMS has now become much smoother with lower requirements in terms of technical documents to be submitted to the regulator.

Q. Final question: What taxes are applicable to Italian remote gaming licenses?

The gaming duty varies depending on the type of game involved. For instance in case of poker tournament, skill games (including fantasy sports), cash card games, casino games, betting exchange and bets on virtual events is 20% of the gaming revenues, while in case of sportsbetting it is 22% of the GGR.

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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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