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A dramatic increase in the Italian Salva Sport betting tax might loom on the horizon as the Italian gambling authority reinterprets this levy, potentially leaving operators facing a significant unexpected financial burden.
During the pandemic, the Italian Government implemented a measure to revive the sports sector, which was hit hard by the Covid-19 emergency. They introduced a new temporary 0.5% sports betting tax, also known as the “tassa Salva Sport,” which is calculated on the turnover generated by bets after deducting other gambling taxes. This tax was initially introduced to assist the Italian sports sector, with a maximum allocation of EUR 90 million for 2020 and 2021. However, the Government reached this cap before the end of the relevant period, leading to the operators being informed that the tax was no longer due for the remaining period.
The challenges and the new interpretation of the Italian Salva Sport betting tax
The Salva Sport tax is a levy that applies to all forms of sports betting, even betting exchange. However, the initial resolution of the Italian gambling authority (ADM) caused a stir as it imposed double taxation on betting exchange games by applying the levy on the amount bet by both the bank and the punter. But, the operators fought back, and the ADM resolution was deemed invalid. A new resolution was issued, clarifying that the 0.5% levy only applied to the amount bet by the bank.
But just when the operators thought they were in the clear, the Italian Accounting Court had other plans. Following a resolution of the Accounting Court on January 5th, 2023, ADM adopted a new resolution that overruled the previous one, stating that the 0.5% levy on sports betting should not be exclusively intended to fund the sports sector for a total amount of EUR 90 million but the whole treasury of the State. This circumstance means that the cap of EUR 90 million only applies to the allocation of the fund to the sports sector, while the amount collected through the levy will have no ceiling.
This scenario will result in a considerable additional amount due by sports betting operators, as the amount collected through the levy no longer has a cap.
The expected claims following the new interpretation of the levy
This latest interpretation of the law has left business operators feeling blindsided, as they had based their expectations on a different interpretation of the law, one that was upheld by the ADM resolutions and the legislative preparatory reports that led to the enactment of the levy. The ADM may have the power to annul its resolutions. Still, it must always act in accordance with the principles of transparency, proportionality, and good faith, which many believe have not been upheld in this case.
A storm is brewing in the sports betting industry as operators are banding together to fight against what they believe to be an unlawful tax. My law firm, DLA Piper, is at the forefront of this fight, assisting operators in their challenges. If you want to know more about the issue, reach out to me, and let’s discuss your options.
On a similar issue, you can read the article “New Italian sports betting rules bring major improvements.”
