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The Italian gambling levy announced with the 2027 budget law approved on 28 October 2026 by the Government should raise around 700 million euro from the sector, and the collection mechanism now under discussion, which combines a higher charge on gaming machines with paid extensions of concessions that expire at the end of this year, creates a contractual exposure for licence holders that is considerably harder to manage than the headline figure suggests.
Three clients have asked me in the last two days what the rate will be, which is the wrong first question, because a provision that nobody will easily challenge will fix the rate, while private communications whose documentary basis an Italian court has just found wanting will decide how the burden falls inside the distribution chain. Operators and their advisers have roughly six weeks to decide which of those two battles they intend to prepare for, and the parliamentary calendar, rather than the eventual percentage, is what determines whether the preparation is worth anything.
What the Government approved on 28 October, and what remains open
The Council of Ministers met on the afternoon of 28 October 2026 and approved the budget bill for 2027 together with the multi-year budget for 2027 to 2029, which now goes to Parliament for approval by the end of the year that means no final approval is in place yet. At the press conference that followed, the Prime Minister put the sector’s contribution in a single sentence, confirming that seven hundred million euro would come from the gaming sector.
The text itself has not yet appeared, which means that everything presently known about the mechanism comes from reporting and from the technical discussions that preceded the meeting, rather than from an enacted provision that can be read and argued over.
The measures described in that reporting, and each of them remains an intention until the articles appear, are an increase of up to one percentage point in the single levy on amusement with prize machines and video lottery terminals, paid extensions of two to three years for betting, machines and bingo concessions at amounts materially above those charged in earlier rounds, limited adjustments on the online channel subject to revenue neutrality, a possible three-year extension of the instant lottery concession expiring in September 2028 with payment anchored to the base price of a future tender, a possible regularisation for esports and local network venues, and the recovery of residual debt arising from the extraordinary machine levy imposed in 2015.
A further element of the package has attracted far less attention than the fiscal measures, although it may prove the more durable of the two. The same reporting describes tighter sanctions against unlicensed supply together with new instruments for the customs and monopolies agency to pursue sellers of illegal online gambling, which, if enacted, would arrive alongside an enforcement apparatus already operating at volume and would extend the blocking and sanctioning powers that licensed operators and intermediaries encounter in practice far more often than they encounter a tax assessment.
The Italian gambling levy has been valued four times in eleven days
The number that matters to a parliamentary committee is not the one announced at a press conference, it is the one that survives the technical report attached to the bill, and on that measure the position is unusually unstable. Within eleven days the same intervention carried a value of 718 million euro in the government’s own budget planning document, close to a billion in the costings circulating within the sector, 800 million according to majority sources reported by a national news agency, and finally 700 million in the announcement itself. Four values, and nobody has published the model of sector capacity underlying any of them.
That instability matters more than it would in a sector with a stable revenue base, because the underlying trend runs the other way. The Court of Auditors recorded gaming revenue of 4.7 billion euro in the first eight months of 2026, down 5.4 per cent, which is roughly 200 million euro less than the comparable period, and the quarterly bulletin published by the customs and monopolies agency for the second quarter of the year has been read in opposite directions by two specialist outlets, both of which report the same absolute figure of 2.82 billion euro while one records growth of just over one per cent and the other a contraction of nearly five. When the evidential base supports two signs, an elasticity assumption embedded in a coverage estimate is not something an operator should concede without argument.
There is also an arithmetic problem inside the package that a committee submission can exploit, and it becomes visible as soon as anyone costs the individual components separately. Reporting puts the three-year extension of retail concessions at between 200 and 250 million euro a year, the instant lottery arrangement produces nothing at all in the first year because the incumbent concession runs to 30 September 2028 and no tender would deliver its first instalments before that year, and the same reporting costs the regularisation of local network venues at roughly 50 million euro and an additional weekly draw at roughly the same figure.
Those components, taken together and at their upper bound, leave a gap of several hundred million euro that only the levy on machines and whatever the bill does to the online channel can close, which means that the measure carrying the greatest commercial consequence for venue-based operators is also the one that has to absorb the arithmetic residue of everything else in the package.
Why paid concession extensions are the vehicle of choice
Retail concessions for bingo, betting, machines and video lottery terminals expire on 31 December 2026, and the tax delegation that should have delivered a structural reorganisation of the sector lapsed on 29 August 2026 without any implementing law, the immediate obstacle having been the absence of agreement between central government and the regions on the distribution of venues, which leaves the administration with expiring titles and no framework to tender into. A paid extension solves that problem in the only way available within a budget cycle, because it produces cash in the relevant financial year, it requires no tender procedure, and the administration can price it by its own act instead of legislating a tax.
The description of the new amounts as materially higher is worth measuring against the amounts currently in force, since the administration publishes those and since a finance committee will actually see that comparison. Under the extension presently being paid, the annual charge runs at 120 euro for each machine covered by the ordinary category, 4,000 euro for each video lottery right, 9,500 euro for each betting shop where gaming is the principal activity and 5,700 euro where it is ancillary, and the administration separately fixes the financial guarantees by its own act. An operator preparing a submission therefore has a precise base against which to test whatever multiple appears in the bill, and the burden of explaining a multiple sits with the party proposing it rather than with the party asked to pay.
A tax increase invites challenge on constitutional grounds and, where it reaches the online channel, on grounds drawn from the freedom to provide services, which is familiar territory and well populated with precedent, as I have discussed in relation to the advertising and excise measures adopted earlier this year and to the earlier stages of this same budget cycle. An extension price, by contrast, invites challenge on the terms of the concession itself, on the proportionality of the amount to the residual duration and to the economic position of the holder, and on the adequacy of the reasons given for the figure chosen, which is a far more fact-intensive exercise and one in which the documentary record assembled before the dispute usually decides the outcome.
What a recent judgment says about recalculated levies
Three days ago an Italian court delivered a judgment that reads as a precise warning about what happens when a levy figure is communicated down a distribution chain without a stated criterion. The seventeenth civil section of the court in Rome, in a decision deposited on 26 October 2026, ordered a concessionaire to repay a machine operator roughly 74,800 euro that the operator had paid towards the extraordinary levy introduced at the end of 2015.
The facts are worth setting out, because they recur across the sector. In February 2015 the concessionaire fixed the operator’s share at a given amount per machine, which the operator paid in full across the ten scheduled instalments, and in March 2016 the concessionaire recalculated that share upward by roughly two thirds, never stating the criterion on which the new figure rested, including during the proceedings that followed. Faced with that demand, the operator paid the difference under an express reservation of recovery, because it needed authorisation to assign the collection contract, and then sued.
The court held that Law 208/2015, at article 1, paragraphs 920 and 921, did not alter the method for computing the burden falling on the concessionaire, which remains anchored to the machine base in place at 31 December 2014 under an implementing measure of 15 January 2015, and that the provision governed only how that burden is shared internally within the chain, with the consequence that the recalculation lacked any legal foundation and the excess was recoverable as an undue payment. Anyone relying on the ruling should proceed with caution, because it carries no published number and the reporting does not describe it as final, which makes it a first-instance holding rather than settled authority.
The timing of all this is what makes it commercially relevant, because the same 2015 levy appears in the reported budget measures as residual debt that the State intends to collect. Operators and concessionaires are therefore facing the possibility that one levy moves in two directions within a single quarter, upwards from the chain towards the administration and downwards from concessionaires towards operators who paid shares that may have been computed on a basis no better than the one just rejected.
The Italian gambling levy is a contractual exposure before it is a fiscal one
My view, and events may prove me wrong on it within a year, is that the first disputes to reach an Italian judge after this budget law will concern the allocation of the extension price inside the distribution chain rather than its amount, because a provision that is hard to attack and politically settled will fix the amount, while private parties will notify the allocation relying on documentary bases that a court has just shown to be fragile. That exposure accordingly sits in three places, none of which has anything to do with the percentage.
The first is the allocation mechanism itself, meaning the clause, or more often the absence of a clause, that determines how the concessionaire passes a renewal charge down to network operators and venues, and whether it may pass it at all where the contract fixes consideration by reference to collection rather than to regulatory cost.
A second exposure lies in the documentary basis on which the concessionaire computes and notifies any share, because the judgment described above establishes, at least at first instance, that a share communicated without a stated and verifiable criterion will not survive a challenge brought by the party that paid it, and the limitation period for recovering an undue payment runs from the payment rather than from the judgment, which means that positions dating back several years remain open while nobody is looking at them.
A third sits in the guarantee package that the administration requires as a condition of each extension, which the administration fixes by its own act rather than the budget law, in the same way that the operating conditions imposed on payment collection in retail venues were imposed, and which falls on balance sheets that in many cases already carry the cost of the two-year extension currently being paid, where the second instalment falls due on 31 October 2026 and, that date being a Saturday followed by a public holiday, has to be settled on the Friday. Most of the sector’s contracts date from a world in which the levy changed by legislation and the internal share changed automatically with it, and that assumption has not held for some time.
The only quantified alternative currently on the table
A submission that argues only against an increase tends to be read as a request for exemption and filed accordingly, whereas a submission that proposes a different structure at comparable yield gets taken into the technical discussion, and on that score the sector has produced exactly one quantified alternative so far. The president of one of the machine operators’ associations set it out on 23 October, proposing that the minimum payout on amusement with prize machines rise from 65 to 70 per cent while the single levy falls from 24 to 19 per cent, with the explicit observation that the reduction should fall on the state’s share rather than on operator remuneration, which leaves the chain with the same eleven euro per hundred played that it retains today before operating costs.
Whatever one thinks of the policy, the structure of that proposal is instructive for anyone drafting, because it concedes the revenue objective, it isolates a single variable, it leaves the operator margin unchanged so that nobody can dismiss it as self-interested arithmetic, and it rests on three published percentages that a committee can verify in an afternoon. The same association has also asked for a national bridge measure covering the period until new tenders are awarded, which is the request most likely to succeed, because the administration needs a bridge for precisely the reasons set out above and currently has no instrument other than a priced extension.
The parliamentary window, and how it actually closes
The bill now goes to the budget committees of both chambers, where the hearings are the filing window, and the committees calendar those hearings in the order in which requests arrive rather than by subject matter or by the standing of the applicant. An operator or association that waits for the committees to publish a timetable before preparing a submission will in practice be preparing it after the technical report has hardened, which is the point at which the coverage estimate stops being negotiable.
There is also a constitutional argument now circulating in the sector that deserves a careful rather than an enthusiastic reading. In judgment no. 172/2026, deposited on 20 October 2026 and available in full, the Italian Constitutional Court struck down the fixed minimum of 50,000 euro per violation set by the law of 12 July 2018, no. 87, for breaches of the advertising prohibition, holding that a punitive charge must be individualised and must take account of the economic condition of the person on whom it falls. That reasoning does not transpose directly to a concession fee, which is consideration rather than punishment, and anyone arguing otherwise should expect to lose on the characterisation before reaching the merits.
What has changed is narrower and still useful, because the insistence that a charge match the capacity of the party bearing it now belongs to the constitutional vocabulary available in this sector, and counsel will argue it against extension prices that carry no published assessment of capacity, particularly where the same authorities elsewhere acknowledge that the typical addressee of these charges cannot pay them in a single instalment. I have examined the advertising side of that judgment, and the consultation it triggered, in a separate analysis.
How other European jurisdictions are pricing the same decision
Italy is not alone in treating the licensed channel as the adjustable part of a budget, and the comparison is instructive because the same unstated assumption appears in each case. Bulgaria notified the European Commission of a full prohibition on gambling advertising combined with a 22 per cent charge on the online channel and a minimum monthly payment of 100,000 euro, filed under the technical notification procedure on 2 October 2026, with the standstill treated as inapplicable because the draft contains fiscal measures.
The United Kingdom moved on the same day as the Italian Council of Ministers, and the design of its measure is the part worth borrowing. The budget presented there raises the duty on machine games from 20 to 25 per cent with effect from 1 April 2027, applying the increase to machines located in adult gaming centres while leaving lower-stake machines on their existing treatment, a distinction the government justified by the need to protect public houses and seaside arcades, with the additional revenue earmarked for a freeze on business rates for retail, hospitality and leisure premises.
Two features of that approach have no counterpart in the Italian option as reported, namely the segmentation of the increase by stake band and venue type rather than its uniform application across the machine estate, and the identification of a specific use for the proceeds, which converts a levy into a visible transfer and makes the policy defensible in a way that an unallocated contribution to general coverage is not.
In each of these cases the state is pricing a channel it can tax against a channel it cannot reach except through blocking orders addressed to intermediaries, a mechanism whose limits the Court of Justice examined this summer and which I analysed in relation to the Italian advertising prohibition, and the elasticity assumption that connects the rate to the yield is never published, which is precisely the gap that a well-drafted submission can occupy.
Italy itself has already produced the observable version of that assumption failing, because a licensed international operator announced its withdrawal from the betting exchange, sportsbook and casino segments here while citing expected regulatory changes, which is to say that it priced a measure that did not yet exist and concluded that the result would not be commercially sustainable. The cost of a levy includes whatever it drives out of the licensed market, and a committee that has a documented withdrawal in front of it sits in a different position from one that has only a projection.
What operators should do before the Italian gambling levy is fixed
I have ordered the actions below by deadline rather than by importance, which in a budget cycle amounts to the same thing.
- Settle the second instalment of the current betting extension on Friday 30 October 2026, because the stated due date of 31 October falls on a Saturday followed by a public holiday and the payment systems will not be available.
- Establish whether a concessionaire recalculated any share of the 2015 extraordinary levy after February 2015, on what stated criterion, and whether the business paid it, since the limitation period for recovering an undue payment runs from the payment and positions from that period remain live on both sides of the chain.
- Prepare and lodge a submission for the budget committee hearings now, rather than when the timetable appears, because the committees take requests in order of arrival and the coverage estimate ceases to be negotiable once the technical report is settled.
- Propose a structure rather than an exemption, and cost it against the published figures, since the components of the package do not add up to the announced total without a substantial contribution from the machine levy, and a submission that identifies the residue and offers an alternative at comparable yield is the only kind that enters the technical discussion.
- Re-read the chain contracts for the allocation of a renewal charge, identifying whether the agreement permits the concessionaire to pass an extension price at all and what documentation it must produce when it notifies a share.
- Date every machine decommissioning precisely from 1 November 2026, when the revised disposal rules take effect with a one-year completion window and a five-year document retention obligation, since the date of decommissioning determines which regime applies and will be the first document requested in an inspection.
- Model the guarantee requirement alongside the fee, because the administration sets the guarantees by separate administrative act and the combined cash effect, rather than the headline amount, is what determines whether an extension is worth taking.
- Decide now whether the business intends to argue the amount or the allocation, because the evidence each argument needs is different, and the business has to assemble the documentary record for the second before a concessionaire notifies a share rather than afterwards.
An operator reading the reporting on this budget law will naturally start by asking what the new rate will be. The more useful question, and the one I would put to a board this week, is a different one. If a renewal charge lands on your concession in January and you are asked to pass a share of it down the chain, can you state the criterion you used, and produce the documents behind it, to a judge who has just told a concessionaire that failing to do so means giving the money back?