Italian Gambling Sector Is Facing Turbulent Times

View of Colosseum in Rome and morning sun, Italy

The Italian gambling sector is facing trouble on multiple fronts. Gaming operator LeoVegas is fighting the country’s gambling ban, and there has been a poor response to new gambling licenses.

A new coalition government came into power this year. It is very anti-gambling, which has caused a lot of uncertainty in the sector.

Gambling-Related Ads Ban

It didn’t take long for the new government to make some significant changes. A blanket ban on gambling-related advertising will be implemented in January 2019. The ban includes sponsorship of sports teams and events by gambling companies.

A lot of teams rely on such sponsorships to survive financially. Numerous clubs had already been struggling to meet the UEFA’s financial fair play requirements. AC Milan received a two-year ban for failing to do so.

Clubs will be fined if they do not follow these new rules. The government has even talked about trying to get similar practices implemented across Europe.

The online gaming giant LeoVegas is taking a stand against this planned ban. They submitted an official complaint with European Union authorities.

As part of the complaint, LeoVegas cited the European Commission Recommendation (2014/478/EU). This recognizes gambling advertising as being a legitimate method for licensed companies to be differentiated from illegal operators.

The company also claims that this ban infringes upon articles 56 and 54 in the Treaty on the Functioning of the European Union. Market access, as a result, is restricted for iGaming providers. There is less of an incentive for operators to cater to the Italian market and growth cannot be ensured due to the lack of marketing tools being available to them.

LeoVegas asserts that less restrictive measures could have been implemented to protect consumers.

While gambling addiction is, of course, a serious issue, LeoVegas believes this approach is “completely wrong” and claims that the government doesn’t understand how strictly regulated the sector already is.

LeoVegas has been in contact to help educate the government on the topic and to find ways of working together. The hope is that the government has a change of heart and listens to these calls for change.

Gambling Licenses Get Poor Response

While the new government is against gambling, the decision to issue 120 online gambling licenses had already been made by the time it came to power.

Italy’s chief regulator, Agenzia delle Dogane e dei Monopoli (ADM), is supposed to issue these licenses by the end of the year. They will be valid for four years.

The licenses will cover everything from sports betting to poker, table games and slots. No online lottery offering will be permitted.

Of the 120 licenses up for grabs, about 30 of them were estimated to be given to those who have recently expired licenses.

The deadline for applications is March 19, 2019. However, the ADM is aiming to have this process completed sooner rather than later. They have promised to issue these licenses on a first-come, first-served basis.

However, there are mounting concerns about the uptake for these licenses because of the ban on gambling ads. Since operators will not be able to properly market or advertise their offerings, it will be very hard for them to grow.

The fee for a license is £175,000 ($321,000). To date, there have been 80 applications, some of which were made before the ban was announced.

With the potential for more drastic changes coming to Italy, there will be a lot of concerned operators. Companies do not want to invest millions of euros in a very fragile market. Instead of a lot of legal online gambling offerings, a free-for-all market, such as was seen at the turn of the century, may return.

It will be interesting to see how many operators actually want licenses if their applications are approved. It could certainly be an underwhelming figure.

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