Gambling

The Italian remote gambling licenses whose extension was forgotten so far…

An extension shall be granded to avoid endless disputes

Some Italian remote gambling licenses are due to expire soon, but the regulator has not granted an extension yet to align their term to the one other licenses.

During the current Covid-19 emergency, the Italian Government is overwhelmed by the actions to be undertaken for the relaunch of the economy. Therefore, some of the upcoming deadlines might have been overlooked. However, the termination date of the Italian remote gambling licenses is crucial for the Italian business of some operators.

The current chaos around the extension of Italian remote gambling licenses

The nine-year Italian remote gambling licenses held by some operators are expected to expire between the last months of 2020 and the first months of 2021. The Italian budget law 2016 regulated the recently-ended tender for Italian remote gambling licenses prescribing just a 4-year duration for the “alignment in time, as on 31 December 2022, of all licenses relating to the offering of the games at a distance” with the explicit goal to ensure that all the Italian remote gambling licenses, including those expiring before the end of 2022, will expire at the same time on 31 December 2022.

This circumstance was confirmed by the Italian budget law 2020 which established that the Italian gambling authority “shall award the following concessions through an open, competitive and non-discriminatory procedure to be launched by 31 December 2020: [—] e) 40 rights to be able to offer games at a distance with an auction basis of not less than EUR 2,500,000 for each right”, urging the regulator to launch a tender for new remote gambling licenses by end of the year.

The terms of Italian gambling licenses and the potential options

The license agreement regulating Italian remote gambling licenses does not provide for its automatic renewal, which is excluded. Therefore the regulator shall issue an order providing for the extension of licenses up to the award of the new license.

This course of action would not be new since the early comers into the market were recently awarded a new license, but operated for almost two years under an expired license. At that time, the regulator just compelled them to commit to join the tender for new licenses as a condition for the extension.

Likewise, holders of betting shop licenses had their licenses repetitively extended during the last years against the performance of a one-off payment.

There is no doubt that the provisions mentioned above created, on the one hand, a reasonable expectation on operators as to the extension of their license and, on the other hand, an obligation on the regulator to launch the new tender by the end of 2020. I honestly cannot see the reason why such an extension should not be granted. Still, political uncertainties are always a factor to be considered in Italy, especially for the gambling sector that is often unpopular with public opinion.

There is no doubt, though, that if the extension is not granted (and if it is not granted soon since some licenses will expire at the beginning of October 2020), the backlash from operators would lead to significant disputes, which could also translate into the flourishing of the unlicensed market. Operators might be considered discriminated against those running recently awarded licenses and claim that they can operate under, for instance, their Maltese license relying on the EU principle of freedom of services.

Such a scenario would yield unparalleled tax losses for the State during a period of financial crisis when the Government cannot afford it.

Hopefully, the extension will be granted soon, but operators are ready for the worst with never-ending legal disputes that might arise damaging the whole country.

Image Credit Laurence Edmondson

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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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