Italy readies to roll new licensing regime, pending EU greenlight

Italy is getting closer to rolling out a new licensing regime that will further strengthen its control over the gambling industry, and hopefully introduce rules and safeguards designed to further boost consumer protection.

Italy readies to switch to new gambling regime

The debate surrounding the existing licensing system in Italy has been contentious with industry insiders cautioning that in its desire to protect consumers, Italy may inadvertently push consumers into the sphere of influence of offshore bookmakers instead.

Among the changes that Italy proposes and is now seeking to enact, pending final approval from the European Commission, the European Union’s executive body, is an increase in the cost of licenses offered to companies from the current €200,000 to €7m.

The new licenses will be valid for a period of nine years, but the new rules still represent a significant uptick in the pricing, allowing well-heeled companies to persevere while forcing smaller ones, which are nevertheless important for competition, to drop out.

Italy has been aggressively pursuing a hardline stance on gambling in general, passing a blanket ban on gambling advertisements – both physical and digital – in mid-2018 with the passage of the Dignity Decree (Decreto Dignita), backed by the populist government of The Five Star Movement.

Ever since that time, Italy has been trying to tighten the noose on the licensing regime in the pursuit of better consumer protection measures, but most of these efforts have elicited a stern rebuke from industry types. Right now, Italy has submitted the final framework for review by the European Commission, which should take no more than three months.

The European Commission, although not having a say in how a Member State runs its own gambling legislation, has to ensure that the laws do not impact the Italian IT sector. Essentially, the watchdog is concerned with anti-competition rules.

Member states unlikely to oppose the legislation

During the review period, any Member State or lawmaker from the European Union may step in and challenge the newly proposed gambling framework. If all goes smoothly, however, the new license regime ought to get underway by January 2025.

The new regime also introduces some earth-shattering changes from an industry standpoint. The text of the new law also targets affiliates, which are an essential lifeline for casinos in driving traffic and engaging with customers. Gambling companies that operate online will also have to host their infrastructure within the European Economic Area.

Overall, Italy has been earning a fair penny from gambling, despite the tougher measures on the industry. Tax revenue windfall sat at €8.4bn in 2021 and increased to €11.2bn in 2022. The industry will continue to be regulated by Agenzia delle Dogane e dei Monopoli, the Customs and Monopolies Agency.

Image credit: Unsplash.com