EGBA worried over proposed changes in Italian gambling law

The European Gaming and Betting Association (EGBA) has been a champion for harmonization of regulation in the EU when it comes to the Union’s gambling industry, and while the majority of feedback has been to hail bold regulatory movements that raise standards and protect consumers, there have been instances where the Association has shown concern.

A proposed change to gambling laws in Italy is one such matter. A newly-proposed government decree on online gambling that is currently being reviewed by the Council of Ministers suggests significantly overhauling existing laws, and effectively becoming the biggest change to the gambling industry since the Dignity Decree was introduced in 2018, and effectively prohibited the advertisement of gambling.

EGBA had something to say about the Dignity Decree as well, arguing earlier in 2023 that Italy had already lost €1bn since the legislation’s introduction in financial opportunity. Now, EGBA is weighing in on the proposed changes to Italian law once again. Maarten-Haijer, Secretary-General of EGBA, had this to say at length in an official statement:

"The proposed increase in licensing fees is unparalleled and unheard of, it would make Italy the most expensive country in Europe to obtain an online gambling license. Together with the other restrictions in its gambling market, such as the local advertising ban, this proposed fee hike will make Italy a closed shop for new market entrants and lead to an exodus of existing licensees. This also raises concerns on compliance with EU law. We urge the Council of Ministers to reconsider the proposal, as it will make the country’s online gambling black market problem even worse, not better."

On the face of it, the law is indeed debilitating. A proposed license fee increase that will send the current €200,000 to €7m, a nearly 35-fold increase. A previously suggested €2.5m proved to be too negligible for lawmakers to consider. EGBA’s arguments are easy to explain even without reading the official statement.

The Association just worries that the market will become even more withdrawn and entrenched, without any opportunity for new operators to break ground. Entering Italy’s iGaming landscape is hard enough as it is already as making a dent in established and known operators' market share would be a near-gargantuan task and one that would definitely require a very solid war chest due to the lack of advertising opportunities.

But far from only barring new entries, a licensing fee of this sort would also most likely force smaller operators out of business. EGBA though understands that the state is determined to eke out everything it can from the gambling industry, regarding it as something that needs to be muzzled and steered to the public’s benefit.

Cognizant of this fact, EGBA suggests that the Council of Ministers takes a more lenient approach that would ultimately have the same results. The Association estimates that the country is after €105m – €140m in additional tax revenue. Implementing the €7m would probably get it that money, but EGBA argues that even maintaining a €2.5m licensing fee and stripping away some of the other restrictions would yield the same results without dramatically worsening the gambling landscape in Italy.

EGBA has signaled that it is prepared to work with the Italian government to clear this up and offer data and evidence-based input that would hopefully help steer the country’s gambling regulation in a better direction. EGBA had refrained from making predictions about whether a lack of competitiveness would result in subdued revenue.

The contradictory point as we understand it is that although competitiveness would be harmed, and the black market would likely grow, the government may continue to drive higher tax revenue yields from the sector. There are also concerns about breaches of existing European Union regulations.

Italy is not the only country that is coming up with a surprise change to its gambling regulation at the last moment of the year. Bulgaria’s Finance Minister, Assen Vassilev, proposed a dramatic increase in the renewal fees, licensing, and tax collection. His ideas have already been put on the country’s budget.

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