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The draft decree introducing a significant reform of the Italian online gambling market is now available, and if confirmed, it might have a considerable impact on the sector’s future. The draft decree setting out the rules of the Italian online gambling market might introduce a sort of revolution in the sector that I summarize below:
Award of new Italian online gambling licenses
At the end of 2024, all the remote gambling licenses in the Italian market will expire. Therefore, a tender for new online gambling licenses shall be launched during the course of next year. According to the draft decree, there will be the award of around 50 licenses lasting nine years and covering all the games that are not subject to exclusive licenses (e.g., online scratch cards) against a fixed one-off price of € 7 million with also the payment of an annual concession fee determined at the rate of 3 percent of the operator’s net margin.
This increase in the price of licenses is the most controversial, also because it has been accompanied by measures considerably limiting the entrance into white label arrangements. In contrast, some license holders had launched a multitude of skins, allocating their investment to several brands.
Also, the Government provided more stringent suitability requirements with, among others, an obligation to lodge a detailed business plan that shall be assessed by a third party concerning its sustainability. Indeed, the Government’s explicit goal is to ensure that license holders are selected according to criteria to ensure they can generate a considerable return from the investment with tax entries for the State.
And, it is stipulated that the license holder must invest a sum equal to 0.2 percent of its net revenues, but not exceeding 1 million euros per year, in information campaigns or responsible communication initiatives, according to themes established by a special commission operating at the Department of Information and Publishing.
PVRs become highly regulated
A business quickly spreading in Italy pertains to PVRs, which are shops selling vouchers for online gambling sites that, in some instances, are operated as betting shops, even though they do not hold a license.
The draft decree now provides that PVRs:
- need to be enrolled in a registry run by the Italian gambling authority;
- have to pay an annual fee of EUR 200 for the first year and EUR 150 for the following years;
- cannot process withdrawals and pay winnings, and
- need to run anti-money laundering checks on the buyers of vouchers, and the vouchers’ value cannot exceed EUR 100.
More stringent measures against illegal gambling
The provisions against illegal gambling not only refer to the measures already in place but also provide that “Regulations shall establish the procedures for the exclusion of the offer of gaming with cash winnings through telematic or telecommunication networks carried out by persons without a concession, as well as, in consultation with the Bank of Italy, the procedures for preventing providers of
payment services providers from operating collection and deposit transactions, relating to gaming operations, for or on behalf of entities without the license mentioned above.” These measures have been heavily discussed for several years, but we will see if they are eventually approved. Indeed, a fine ranging between EUR 30,000 and EUR 180,000 is provided for in the case of
case of violation by telephone operators or payment service providers of the obligation to inhibit the use of telematic and telecommunication networks or payment services, respectively, imposed by ADM.
I am concerned about the skyrocketing price of licenses as it might represent a barrier to entrance into the market, significantly if the measures on the gambling advertising ban are not softened.
The above-mentioned rules are not yet final, even though they had a preliminary approval by the Italian Board of Ministries. I do believe there will be substantial lobbying activities during these days before any potential final approval.
On a similar topic, you can read the article “Top 5 Takeaways on the Italian Gambling Market from the SiGMA Summit“.