30-second summary:
- Italy’s coalition government has an anti-gambling stance
- It brought in a blanket ban on gambling advertising and sponsorships
- A number of gambling taxes have been increased
- The government now plans to ban betting on amateur sporting events
- Sports betting revenues continue to decline in recent months
The anti-gambling stance
The Italian coalition government adopted an anti-gambling position when it came to power in 2018. This coalition is led by the Lega-5Star party; its members believe that problem gambling is a scourge on the Italian people.
One of the government’s first major moves was to implement a blanket ban on gambling advertising. This meant that companies could no longer differentiate themselves by their advertising efforts. The ban came into effect on January 1 and already there are warning signs that it will be detrimental to the gambling sector, with sports betting figures being significantly down.
The ban includes a block on gambling companies sponsoring sports teams and events. As this is a major source of revenue for many teams and groups in Italy, it is a massive blow for them. They will now struggle to meet UEFA’s financial fair play standards.
This part of the ban will come into play in summer 2019, which gives the teams some time to arrange alternative sponsorships in the meantime.
Tax hikes
The government has also hiked the tax rates on the gambling sector. The tax on online casinos is increasing to 25% from 20%, which the government hopes will generate another $57m through tax revenue each year.
The rate for online sports betting is going from 22% up to 24% and sports betting at physical sportsbooks also has a 2% increase up to 20%. Operators are going to be hit with costs of as much as $34m extra each year following these changes.
There are also plans in the works to increase the tax rates on video lottery terminals and slot machines, which is likely to drive a lot of competition out of the Italian market. Pairing the tax rises with the advertising ban, it will be an untenable market for many of them.
A ban on amateur sports bets?
Now the Italian undersecretary for sports, Giancarlo Giorgetti, is saying the government is planning to ban betting on amateur sports in the future. He believes this move is needed to further crack down on corruption in sports.
This follows an investigation into sports corruption by the newspaper Corriere della Sera. The paper’s report revealed that many licensed bookmakers are accepting bets that involve amateur and underage athletes.
Pressure has mounted on Giovanni Tria, the minister of economy and finance, to consider a review of the Italian gambling regulator as a result. Giorgetti said they are “ready to take action” on this matter. The ministers are already in talks with the Magglingen Convention to draw up provisions relating to identifying and prosecuting those found to be manipulating sporting events.
Giorgetti said: “I aim to ban bets on amateur sports, because amateurs and young people are more vulnerable. Do consumers want to bet? That’s fine, but only on professional sports, for obvious reasons. I am in touch with Benedetto Mineo, managing director of the Agency of Customs and Monopolies [the regulator], to set up new rules on this issue. I am convinced that we will achieve a result, but of course, it is a rocky road.”
What does the future hold?
The anti-gambling stance looks set to continue as long as the coalition government is in power. The Italian gambling industry is bracing itself for more changes in the future. Signs of cracks are appearing already.
Year on year, in January, Italian sports betting revenue fell by more than 17%. Some have pointed to the Serie A soccer league’s winter break beginning in January rather than December as the chief reason for this. However, December 2018’s figures also saw a decline – of 55% year on year.
The bulk of the decline was in retail sportsbooks. The online casino sector did have a strong January, seeing a year-on-year increase of 20.5%. However, because of the advertising ban, a number of non-Italian licensed online casinos are starting to gain traction in the country.
This is tax revenue that will not be going towards the Italian authorities. These online casinos could grow in popularity over time as they are now appearing at the top of search results in the country.
