Italian corporate criminal liability for gambling operators offering their games in Italy could be triggered also by crimes of illegal gambling and fraud in sports competitions, requiring immediate action to protect the company.
I already discussed about the Italian corporate criminal liability regime for gambling operators in this blog post. But the scenario might become even more relevant as a consequence of a law proposal to be discussed by the Senate in the coming days. But here is a bit of background on the current regime and the change that might be introduced soon.
The Italian corporate criminal liability regime
Italian law provides a regime of corporate criminal liability and sanctions in the event that the directors/managers/employees commit certain types of crimes in the interest of, and or to the advantage of, their companies (or group companies). In this context, the activity of gambling operators that
- offer their games under a public gambling license;
- are monitored by the Italian gambling authority, ADM, and
- communicate the data relating to gambling transactions through the protocols of communication to ADM’ servers
creates the risk of commission of, among others, the crimes of
- corruption and bribery,
- misappropriation to the detriment of the State,
- informatics fraud (e.g. in case of notification of erroneous data to AAMS through the protocols of communication or installation of malware on the player’s pc) which includes also liabilities for a cybercrime,
- money laundering (also because Italian licensed operators shall comply with Italian AML law even if they are foreign entities) and
- breach of intellectual property rights.
Therefore, in the scenarios above, the personal criminal liability of the individuals that commit the crimes is in addition to the corporate criminal liability of the company itself.
The proposal to expand the Italian corporate criminal liability regime to gambling crimes
Under the current proposal, the above mentioned regime of corporate criminal liability would be extended to the conduct of “fraud in sports competition, games and gambling conducted illegally or through the use of forbidden instruments“.
This change would considerably expand the number of crimes that can be challenged to gambling operators and suppliers, making for them essential to adopt measures to limit their risk exposure.
How to limit such liability risk?
The sole available defence against potential Italian corporate criminal liabilities is to adopt an internal corporate model of organisation and management of the company (or of the group if more companies are involved), aimed at preventing the commission of crimes:
- identifying the potential risky areas/persons and their modalities of operation;
- implementing an appropriate internal monitoring system to exclude/limit the potential risks; and
- appointing an Audit Entity that shall monitor the proper adoption of the model.
The implementation of a corporate model of organisation and management places the company in a stronger position. The company will be able to prove to have adopted any possible defence against liabilities and that the criminal conduct is just the result of the misconduct of a few individuals who by-passed the internal controls.
This is not like the Ethical Code that some companies might have adopted abroad, but sets stringent internal rules of operation that have to be tailored on Italian case law. Therefore, a tailored support will be needed.
An issue also for foreign gambling operators/suppliers
Italian corporate criminal liability risks are relevant also for foreign online and land-based operators holding an Italian gambling license as well as suppliers.
Indeed, Italian law applies to crimes committed in Italy and such circumstance is met if
- either the action or the omission that constitutes the crime is entirely or even partially committed in Italy;
- or if the event or action occurs in Italy.
Therefore even if the action/omission (or part of it) is performed abroad such conduct can trigger the applicability of the Italian criminal liability regime if it triggers an event occurring in Italy.