Italy Predicts €650m State Revenue with Fourth Tax Hike on Gaming Machines

  • New coalition government plans to bring in a fourth set of gambling tax increases in the past year
  • Prime Minister believes this will raise an additional €650m ($722m) for the state
  • Decree will come into effect by February 10, 2020 if approved by the European Commission
graph showing rise in taxes
The fourth tax hike on gaming machines proposed by Italy’s government over the past year is currently awaiting the European Commission’s approval. [Image: Shutterstock.com]

The latest move against the gambling sector

Italy’s newly formed coalition government 5Star-DP is now bringing in a fourth round of tax increases over the past year for gaming machines in the country. 

This move is part of the first ‘Budget Law’ decree of the new coalition and is set to increase the turnover tax on video lottery terminals from 7.9% up to 9%. Those operating game arcades are also seeing tax hikes, as amusement-with-prize machines are having their taxes rise to 23% from a previous rate of 21.6%.

additional revenue of €650m ($722m) for the state

Prime Minister Guiseppe Conte, who leads the coalition government, believes this latest tax increase on the 150,000 gaming machines in the country will lead to additional revenue of €650m ($722m) for the state. 

Proposal under review by the European Commission

The European Commission has received Italy’s budget proposal and will now review it to ensure it is in line with the commission’s deficit targets for the Italian economy. 

If and when the decree gets approval from the commission, the new tax increases will come into effect by February 10, 2020.

A new crackdown on gambling-related money laundering

The Italian government also mentioned there will be an extensive crackdown on gambling transactions, due to the gambling sector being used as a money-laundering tool by criminals.

All parties with a gambling license in Italy will need to sign up to a new mandatory registry that is under the control of the country’s Customers and Monopolies Agency (ADM).

The ADM will be given extensive powers by the government. These will include the ability to prevent banks from processing payments to any companies that do not have a gambling license in Italy. It will also hand out fines of between €300,000 ($333,000) and €1.3m ($1.44m) to any financial institutions that are not compliant with these measures.

The government is also looking to provide the ADM with more control over how gambling enterprises are funded. The aim is to prevent all companies from using loopholes to launder money, as seen in the Glassia investigation case

Other recent anti-gambling moves

A campaign to curtail the prevalence of gambling in Italy has been in place since early 2018. It began with a ban on all forms of advertising from gambling companies, including sponsorship deals. This was followed by a number of tax hikes on gambling operators. 

Earlier in October, plans were revealed to subject lottery jackpots of more than €100m ($111m) to a 23% tax, against the earlier rate of 12%. The Italian government is also looking at introducing a tax on any gambling winnings that are worth less than €500 ($555). Finally, there was talk of banning the use of cash to make bets at retail gambling facilities.

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