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Extension of betting shop gaming licenses and new regulations on esports in Italy

The government has adopted emergency measures for the gaming sector that include an extension of betting shop gaming licenses and laying the groundwork for regulations of esports in Italy.

The Italian government had, among others, two complex issues on the table to deal with,

  • the extension of betting shop gaming licenses, the expiration of which had already been renewed numerous times, and
  • the regulation of esports, which had given rise to considerable controversy with the seizure of LAN rooms that transitional rules had followed.

The extension of betting shop gaming licenses in Italy

With respect to gaming concessions on betting outlets, the reason for the continuous extensions in recent years is related to the expectation of new regulations on the matter that, among others, will have to define the places where outlets can be located and the opening hours with uniform regulations at the national level, instead of the current multitude of regional provisions.

The government has recently been given the mandate to implement a reorganization of the entire legislation related to the gaming sector.  Thus, with Italian Law Decree 36/2022, it was provided that, pending the adoption of this new legislation, “the expiration term provided for concessions in the field of collection of bets on sports events, including horse racing, and non-sports events, including simulated events, shall be extended for consideration until June 30, 2024.

This extension is onerous because license holders will have to pay the annual sum of € 6,000 per license on shops having as their primary activity the marketing of public gaming products and € 3,500 per license pertaining to shops having as an ancillary activity the marketing of public gaming products (the so-called corners).

It was an inevitable extension in the current regulatory environment.  Still, it is also true that a new regulation of the gaming sector has been awaited for almost a decade now, which, also due to changes in government, has never been implemented.  The current situation has thus created a market for (expired) betting concessions that would not otherwise make sense but currently is the only way license holders can enter the market or expand the number of outlets.

The same scenario for the rest is present (and has no solution at the moment) concerning remote gaming licenses, all of which will expire at the end of 2022 and will likely be subject to a similar extension.

It is hoped that the government will understand the absurdity of this scenario and adopt legislation that will finally provide operational certainty to the industry.

The forthcoming introduction of regulations on esports room

Esports games in LAN rooms are currently subject to the transitional regime mentioned above.  Article 110 of the TULPS provides the category of games for which “for which access to the game is regulated without the introduction of money but with time or purpose use,” but the category is extremely broad and difficult to define.

For this reason, Decree Law 36/2022 stipulates that this category is to be identified by order of the director general of the gambling authority with specific reference to machines “that do not distribute coupons and [—], based only on skill, physical, mental or strategic, or that play only audio and video or are devoid of player interaction.

These machines will not be subject to the requirement to obtain clearance under Article 38 (3) and (4) of Law No. 388 of December 23, 2000.  However, machine operators will, in any case, owe the entertainment tax referred to in Article 14 -bis , paragraph 5, of Presidential Decree No. 640 of October 26, 1972.  To this end, clarifying obligations will be defined by a decree of the Minister of Economy and Finance.

The solution proposed above would seem to be a sort of compromise between the need to avoid blocking the market through an approval regime that is excessively onerous and still ensures tax revenues for the State.  It will be necessary, however, to check ADM’s measure to understand whether the category will be defined with a broad enough perimeter to encompass every type of esports game.

On a similar topic, the article “Esports gaming halls subject to transitional rules in Italy” may be of interest.

Photo by Nick Fewings on Unsplash

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Giulio Coraggio

I am the location head of the Italian Intellectual Property & Technology department and the global co-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 client's success.

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