Italy’s New Gaming Tax Laws: Biting into Profit
Italy introduced a number of restrictive gaming measures in 2018. The country voted on a gaming ad ban effectively seeing all content promoting the activities of iGaming brands stripped from the public, including physical and digital advertisement media.
Following a Sunday vote by Italy’s Senate, the country’s lawmakers have decided to introduce additional tax hikes. The law passed with 167 in favor and 78 against, with the entire Senate participating in the decision.
The new budget will come into effect on January 1, 2019, with the Chamber of Deputies receiving the legal documents on Monday, December 24. The Budget Committee will review the proposed measures on Thursday, December 27, and then a vote will take place on Friday, December 28.
Abruptly-proposed, the measures are a tangible increase on the existing rates, with all levies going up, including:
- Casino revenue – 25% from 20% previously
- Sports betting – 24% from 22% previously
- Virtual betting – 22% from 20% previously
All of these changes are coming into effect on January 1, 2019. The slew of increases is intended at boosting the overall revenue in favor of the government. According to the lawmakers, the online casino segment taxation alone will be adding €50 million annually to the state’s wealth.
Understandably, this has prompted reactions across the industry, with Logico, Italy’s gaming operator association, Moreno Marasco, cautioning against the hikes, and the consequences.
Mr. Marasco believes that just like any other overbearing legislation, the changes introduced to the Italian market will drive out respected and licensed house names, leaving a majority of offshore companies.
Businesses Speak Up Against the Measures
A similar opinion was shared by Geronimo Cardia, president of Acadi, another Italian gaming body, who said that his organization is yet to comprehend the implications of the new development in terms of cost for the businesses that operate in the country. The measure, Mr. Cardia’s colleagues estimated, was equally restrictive as the all-out blanket ban on advertisements.
Every segment of the industry will be affected, including the land-based gaming machines, but more importantly – the possible maximum payouts will be falling between 68% ad 84%, which in terms is expected to reduce the number of hours people spend playing.
Looking at the tax changes more closely, Italy will be adding €770m across the board from all available segments in the industry in fresh money for the state. And while businesses have been sharing their concerns openly, Italy’s Prime Minister Giuseppe Conte has repeatedly said that the measures will introduce a balance between how much operators win and how much they commit back to the government and their customers.
Mr. Conte is known for his anti-gaming rhetoric and populist vibe in delivering legislative measures. Gaming is a particularly vulnerable segment as it can be argued against based on popular dislike as an idea, even if Italy’s gamers are quite active.
Killing opportunities at home can only push Italy’s gamers to seek alternatives elsewhere. This is not the sort of customer protection Mr. Conte hopes for.