The Lazio Court upheld the position of Italian gambling licensed operators whose license had expired in the last months, granting an extension up to the end of 2022.
The dispute between operators holding an expired Italian gambling license and the regulator
In a previous post, I had discussed the situation of some operators whose license was due to expire in October 2020.
The Italian budget law 2016 regulating the recently-ended tender for Italian remote gambling licenses had prescribed just a 4-year duration for the “alignment in time, as on December 31, 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 December 31, 2022. And 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 December 31, 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 the end of the year.
Despite the above, during the past months (and even very recently), the Italian gambling authority, ADM, had sent termination notices to Italian licensed gambling operators. Such notices referred to the operator’s disconnection from the ADM’s servers, which would lead to the immediate closure of the platform’s operation due to the technical features of Italian licensed websites that need to communicate in real-time with the regulator’s system to notify transactions.
This scenario left operators unable to continue operating since a new tender for Italian gambling licenses had not been launched. As such, their whole Italian business was at risk of being destroyed.
The position of the Lazio Court on the extension of Italian gambling licenses
The Italian gambling authority’s termination notice translated into a rough reaction from operators that filed plenty of appeals seeking an interim injunction from administrative courts suspending the termination of licenses.
The groundedness of the position of Italian operators was confirmed by the Lazio Court both as part of the interim proceeding and now in the merits, extending the term of licenses up to the end of 2022.
According to the Lazio Court, the Italian gambling authority should have pursued the legislator’s intention regarding the extension of the license term to December 31, 2022, to ensure the continuity of tax entries and fight against illegal gambling by aligning all the existing license holders’ terms. As such, the license terms shall be extended to the end of 2022. Indeed, at the end of 2022, all the remote gambling licenses in the market will expire, and there shall be a new tender for licenses. The Lazio Court deems this solution in line with the Italian Constitution without discriminating against those whose license did not expire.
What happens next?
The decision mentioned above has not been issued yet to all the operators that appealed against the decision of the Italian gambling authority. However, I don’t see why the same courts of action should not be upheld in the other cases.
Appealing operators will now be allowed to continue operating up to the end of 2022. But the central questions at this stage are whether:
- The Italian gambling authority will launch the new tender for Italian gambling licenses and award the licenses before the end of 2022, or a new extension shall be required?
- The terms of the new tender for Italian gambling licenses will be challenged. Indeed, the restriction to sole 40 licenses with a minimum bidding price of € 2,5 million is blatantly creating a barrier to the entrance into the market in breach of the EU principles of freedom of services.
The battle is not over, but this court decision is a pivotal victory for the Italian gambling market.