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Italy – EGBA ‘deeply concerned’ over new Italian decree on online gaming

By - 20 December 2023

The European Gaming and Betting Association is deeply concerned about the proposed new Italian decree on online gambling, which is currently under discussion in the Council of Ministers. The decree includes provisions that would introduce a significant reorganization of the sector, particularly regarding the cost of license fees. The possible introduction of (quasi) prohibitive licensing regimes and fees also raises concerns on compliance with EU law, which will merit consideration.

Recent news reports suggest the decree will set an unprecedented €7 million license fee, far surpassing other EU Member States. EGBA believes that such a substantial increase in the license cost is unwarranted, particularly when compared to the country’s previous licensing tenders for online gambling operations. The proposed fee represents a 35-fold increase from the 2018 license fee of €200,000 and triples the Italian authorities’ previous license fee proposal of €2.5 million, which was never implemented.

EGBA stresses that this significant license fee hike will have severe consequences. The high fee will deter new market entrants and likely force existing licensees, especially smaller operators, out of the market. This would, EGBA believes, lead to a drastic cut in the number of licensed operators from the current 91 licensees to a mere 15-20, contributing a significant increase in the size of the country’s online gambling black market, posing inherit risks for player protection.

Italy’s online gambling black market is already one of Europe’s largest, valued at over €1 billion annually and the fee proposal will make this situation worse, not better, with grave implications for the protection of Italian players.

Anticipated revenues from the proposed licenses, even in the most optimistic scenario, range between €105-140 million for the Italian state. EGBA suggests that implementing the current unused tender proposal of €2.5 million, without the previously suggested limiting factors of 40 licensees and an auction mechanism, could yield a similar or higher tax revenue without significantly harming market competitiveness.

The primary goal of Italy’s gambling regulation should be the protection of players and fostering a fair and competitive market environment and, thus, EGBA urgently calls upon the Council of Ministers to reconsider the proposed punitive increase in license fees. By limiting competition to only a few operators and inadvertently bolstering the size of the black market, the proposal risks undermining player protection.

EGBA is committed to working with the Italian authorities to develop a license fee framework which supports a well-regulated and sustainable online gambling market, prioritizing player protection and ensuring a level playing field for all operators. The existing advertising ban, which is currently exploited by black market operators, should be revoked to allow regulated advertising that protects minors and vulnerable groups, while enabling licensed operators to market their regulated gambling offer.

Maarten Haijer, Secretary General, EGBA, said: “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.”

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