08 Aug Italian gambling advertising ban in place and now?
The Italian gambling advertising ban became law with its approval by the Senate, opening up questions on what strategy operators should take.
The 7th of August 2018 was a dramatic day for Italy with the approval by the Senate of the so called Dignity Decree that, apart from the provisions on the gambling advertising ban which are confirmed with no major change, introduces other very controversial provisions.
What does the gambling advertising ban provide?
The provisions of the law which (luckily) are drafted with a quite confusing language provide that:
- it is prohibited any type of advertising relating to games with cash winnings and gambling, including indirect advertising, performed on any channel, including sports, cultural, artistic events, TV or radio programs, the press, publications, billboards and electronic, digital and telematic channels, including social media; but
- for sponsorship agreements relating to events, activities, demostrations, programs or services and for any other type of communication of promotional content, including visual or sound messages and the display of the name, trademark, symbol, activity or products of gambling and games with cash winnings, the prohibition is applicable from the 1st of January 2019; and
- in relation to ongoing advertising agreements, the previous gambling advertising regulations apply for a year (i.e. up to 14 July 2019);
- also any advertisement shall refer to issues deriving from games with cash winnings as “disorders from gambling” (in Italian “disturbi da gioco d’azzardo“).
The potential fines have been also increased to 20% of the value of the sponsorship or advertisement and in any case an amount of at least € 50,000.
What will change right now for gambling advertising?
In my view, as of today nothing will change for gambling advertising since:
- the regime applicable to “any other type of communication of promotional content” relating to gambling grants a transitional period up to the 1st of January 2019 which has a language that is so broad that might be applicable to any type of advertising; and
- the regime applicable to “ongoing agreements” grants an additional transitional period up to the 14th of July 2019.
But there is no doubt that gaming operators that make investments in the sector want to have certainties as to the possibility to advertise in the future. This option can now only go through competent courts and authorities since no further approval is required by the Parliament.
Why can the gambling advertising ban be challenged?
There are multiple reasons why the gambling advertising ban can be challenged, including the following:
- It is in contrast with the principle set forth in the Italian Constitution on the freedom of doing business, since – as expressly provided by the accompanying report of the Dignity Decree – such measure is preventing online gaming operators from doing business as they cannot make their customers aware of their products and services in any manner and operators hold a license that is authorizing and actually obliging them to offer their games;
- It was not notified to the European Commission under the procedure required by the Directive (EU) 2015/1535 which is applicable to technical regulations such as the one on gambling advertising; and
- It is in contrast with the EU principles of providing services since it is creating a major barrier to the entrance in the Italian gaming market as new entrants would not be in the position to promote their products and compete in the market.
What are operators going to do now?
The strategy of gaming operators might be twofold. A new season of disputes will open up and at the same time operators might become “creative” to support their business.
The potential channels to challenge the law are both at the European level before the European Commission and (indirectly) the European Court of Justice and at the national level before the Constitutional Court that has already cancelled in the past broad prohibitions. However, given the lenght of the process before such authorities, it is necessary to move quickly as the 16th of July 2019 is not too far.
At the same time, tobacco companies thought an interesting lesson to the market on how to create new opportunities when an advertising ban is in place.
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