Gaming Law 2020

Last Updated November 24, 2020

Italy

Law and Practice

Authors



Sbordoni & Partners has a team of six lawyers and two paralegals working from its headquarters in Rome. Its practice includes legal and business affairs advice and assistance on all major gaming licences in Italy, mergers and acquisitions, amicable resolution and management of disputes, international arbitrations, joint-venture agreements, drafting law proposals on gaming and betting, handling relations between main players and governmental agencies in introducing and utilising property rights on games and lotteries, and studies on new games projects (bets, lotteries, pool games). The firm also provides technical and legal advice to all major gaming licensees in Italy and abroad. Sbordoni & Partners has been working on legislative amendments of gaming law since 2000, the harmonisation of Italy’s new Penal Code with existing gaming regulations (statutes and decrees), a project promoted by the National Counsel of Economy and Labour, and “Amministrazione Autonoma dei Monopoli di Stato” for the drafting of "white papers" on gaming in Italy.

The gaming turnover in Italy has increased considerably, and is near to EUR101 billion. This is a growth of 5% when compared to 2016, which is interesting considering that in 2006 the sector generated revenues of EUR35 billion.

The variety of platforms on offer greatly increases the ease of access for users, especially from mobile devices. Moreover, due to COVID-19, usage has increased.

Live online casinos have also grown since 2019. In general, players prefer to bet online rather than going to physical gaming points.

Slots have become the most favoured, surpassing poker, also thanks to the flexibility of being able to play wherever you are and with a wide range of games available.

Forced Closure

The forced closure of physical game activities due to COVID-19 involved significant damage to public gaming, especially in the new slot and video lottery terminal (VLT) sectors, already penalised by 2019 laws which provided for an increase in the tax levy.

Provisions in March 2020 first ordered the suspension of games through electronic devices (Awp) located in gaming rooms, the deactivation of monitors and televisions used for the collection of national totaliser numerical games (Super Enalotto) and fixed odds (such as Lotto) at tobacconists and other authorised shops. Later, the closure of the dedicated rooms, bingo and betting rooms was ordered throughout the territory.

Gaming revenues for the period January to April 2020 fell by 35.5% (38% for machines) compared to the same quarter of 2019. Particularly penalised were video lottery terminals, which were already in crisis at the beginning of the year following the introduction of a health card for activation of gaming terminals and an increase in the payout.

Reopening

The reopening of the physical gaming rooms became possible only from 15 June 2020. However, during the so-called Phase 2, numerous measures were introduced regarding congresses and large fairs, slot halls, bingo and betting, containing recommendations aimed at countering the spread of the infection (rules of conduct, contact tracing, etc)

As mentioned, only online gaming had a marked increase. In just one month, by the end of March 2020 the new gaming accounts increased by 35% in comparison to figures from February. Given the boom in online gaming, the Legislature took measures to block illegal gambling sites.

Because of the recent recurrence of COVID-19, on 18 October 2020 further restrictive measures were ordered, in particular the closure of betting rooms and bingo at 9pm.

In Italy, the following sectors of online gaming are allowed: betting, bingo, casino, lotteries, fantasy sports, social games, and poker.

However, the exercise of these activities is permitted only on “.it” sites and never on “.com” sites, that is, on sites authorised by the Italian state. As a result, all online gaming sites must have an ADM licence in order to operate legally. This certification is issued by the Customs and Monopoly Agency, which certifies the correct adherence of the gaming provider to the ADM Service Charter. Otherwise, the measures allow the Authority to block the sites considered illegal.

Since 2009, online poker in Italy has been legalised but is governed by a very strict law that regulates all aspects of internet poker rooms - from the location of headquarters to the control of gaming operations.

The first in Europe to create a well-defined legal poker system, ADM has ensured that the sector can develop in a manner consistent with the interests of the players.

The following sectors of land-based gaming are allowed: betting, bingo, casino, gaming machines, and lotteries. Further, for all these sectors, it is necessary to hold an ADM licence in order to operate legally.

There are only four casinos authorised by Italian state, in Sanremo, Campione d’Italia, Venice and Saint Vincent.

Poker is legal when it does not constitute gambling; that is, when skill prevails over (or is equivalent to) the luck component. Specifically, poker is random and, therefore, constitutes illegal gambling when each bet is made directly with money and not with fiches; a so-called cash game. However, in tournaments there is a fixed registration fee for all players, to whom the same amount of fiches is delivered, with no cash value, and the prize pool is established at the start; it will not be possible to gamble.

In Italy, gaming is regulated by a large number of national and regional laws/provisions and pending an effective systematic reorganisation aimed at a reconciliation between entrepreneurial and social good.

Civil and Criminal Codes

The civil and criminal codes contain a few rules dedicated to gaming.

Articles 1933-1935 of the Civil Code regulate the payment of winnings and establish that the payment cannot be the subject of a legal action in the absence of fraud, unless the object of the bet is a sports, running or weapons competition or a legally authorised lottery.

Articles 718-723 of the Criminal Code establish penalties for those who organise and participate in illegal or unauthorised gambling activities, ranging from arrest and imprisonment to fines of a monetary nature. Article 721 defines games of chance as those in which the purpose of profit occurs and the winnings or losses are entirely or almost entirely random.

The Consolidated Law on Public Safety (TULPS)

The Consolidated Law on Public Safety (TULPS) of 1926, and subsequent updates, establishes:

  • the necessary authorisations to legally exercise an activity related to gambling and imposes the obligations relating to managers;
  • prohibits gambling for minors;
  • establishes the system of concessions and authorisations for the exercise of bets (Article 88); and
  • regulates the activity of game rooms with AWP and VLT (Article 110).

Legislator Intervention

Since 1998, the legislator has intervened several times to combat illegal gaming.

Law 266/2005 defines the role of the Autonomous Company of State Monopolies, today the Customs and Monopoly Agency, which has the task of supervising games with cash prizes and countering operators without Italian authorisation.

Liberalisation Measures

The liberalisation measures of the early 2000s (Bersani Decree No 223/2006, converted into Law No 248/2006) are fundamental for the emergence of illegal Italian gaming (estimated at about EUR25 billion in 2015) and for the development of a legal sector, with favourable economic (employment, tax revenues, increased consumption) and social consequences (channelling into legitimate circuits, monitoring of cash flows and problem gamblers, previously at the mercy of clandestine markets).

Law 296/06 introduces totaliser number games.

From 2009 to 2011, the legislator dedicated many regulations to the protection of minors under 18, with an absolute ban on gaming and increased penalties against internet sites and physical establishments that do not implement the necessary measures (Laws No 88/2009 and No 98/2011).

The Balduzzi Decree No 158/2012 is the first to deal with gambling addiction, with interventions on advertising.

Law No 23/2014 (so-called fiscal delegation) gives the government a delegation for the realisation of a fairer tax system and in this context, provides, with reference to public games, the implementation, through decrees, of the reorganisation of the current provisions, through collection of all the rules in force in a gaming code, without prejudice to the organisational model based on the concession and authorisation regime. Moreover, this task has not yet been completed

Law No 208/2015 (2016 stability) provides for the definition by the State-Regions Unified Conference of the characteristics of the points of sale, and the criteria for their territorial distribution/concentration for the purpose of health protection and public order.

The Dignity Decree No 87/2018 prohibits advertising of gambling both online and offline, aiming to limit its impact, especially on young people; increases tax withdrawals on slot/VLT; and increases by 20% the taxation of winnings over EUR500 in national lotteries, scratch cards and Super Enalotto.

Fiscal DL-Law No 157 / 2019

The above law:

  • extends the call for tenders for betting and bingo competitions and extends the concessions in place to 31 December 2020;
  • extends the introduction of new AWPR devices (new generation remote-controlled slots) intended to replace the current slot machines (AWP);
  • provides that the authorisations for the AWPs can no longer be issued "after nine months" by the ministerial decree containing the technical rules for the production of new AWPR devices;
  • also extends the disposal of the AWPs to the 12th month following the publication of the aforementioned decree; and
  • provides for the single register of public gaming operators, as a qualification for "old" and new "operators.

Law 160 0f 2019

Law 160 of 2019:

  • provides that by 31 December 2020 a tender is called to award the nine-year, non-renewable concessions for AWPR and VLT and rights for online gaming;
  • changes the taxation on AWP and VLT devices: 23.85% (AWP) and 8.50% (VLT) starting from 1 January 2020; 24.00% and 8.60% as of 1 January 2021;
  • reduces the payout – the winning percentage for players – for AWP and VLT; and
  • changes the levy on winnings (starting from 15 January 2020, 20% for the share of winnings exceeding the value of EUR200, and from 1 March 2020, 20% on the part of the winnings exceeding EUR500).

COVID-19

Due to COVID-19, the Italian Care Decree No 18/2020 provides:

  • the extension of the terms for calling tenders relating to entertainment machines, remote games, betting and bingo; and
  • the extension of the deadline for the replacement of gaming machines and for the entry into force of the single register of public gaming operators.

Further, the August Decree No 104/2020 provides for the extension of the terms of the technical-organisational and economic obligations required by the award of the tender for national totalisator numerical games. Due to COVID-19, the Relaunch Decree No 34/2020 ordered the establishment of the "Fund for the relaunch of the national sports system" and until 31 December 2021 a share equal to 0.5% of the total wagers relating to sporting events, including virtual ones, carried out both online and through traditional channels, is paid to the state and is destined for the Fund.

Local Authorities

Over the years, many local authorities (municipalities and regions have limited regulatory powers to issue additional gambling regulations in their territories) have also tried to propose restrictive initiatives aimed at reducing the phenomenon of gambling, especially as far as it concerns VLT rooms and slot machines, with interventions on minimum times and distances from so-called sensitive places, such as schools. However, these provisions cannot replace or invalidate national regulations.

Therefore, legal disputes often occur between sector operators and local administrations on the correct interpretation of national regulations and on the measures adopted by local authorities.

Gambling is based on risk and luck. The law prohibits it, unless it is authorised by the state.

Land-based gambling or offline games include all the activities of games performed on physical sites (casinos, betting rooms, etc).

Online play includes bets, games and lotteries that can be run remotely, usually on connected devices such as smartphones, tablets and PCs.

Articles 718-723 of the Criminal Code establish penalties for those who organise and participate in illegal or unauthorised gambling activities, ranging from arrest and imprisonment to fines of a monetary nature. Article 721 defines games of chance as those in which the purpose of profit occurs and the winnings or losses are entirely or almost entirely random.

The Italian Criminal Code provides for two distinct cases in relation to gambling, namely "exercise" and "participation", governed respectively by Articles 718 and 720.

The first punishes anyone who, in a public place or place open to the public or in private circles of any kind, plays a game of chance or facilitates it. The penalty is imprisonment from three months to one year and a fine of no less than EUR206.

The second punishes anyone who, in a public place or place open to the public or in private circles of any kind, without having participated in the offence provided for in Article 718, is caught while taking part in gambling. In this case, the sanction imposed is imprisonment for up to six months or a fine of up to EUR516.

Of course, the reference is to games not authorised by the state.

See 3.1 Key Legislation.

The main regulatory authority of the gambling industry is the ADM Customs and Monopoly Agency.

The jurisdiction’s approach to regulation is prescriptive

Distinguishing by type of game, there are three main categories of licences:

  • sports and horse racing betting;
  • casinos, including poker and other games of skill; and
  • both national and private lotteries.

It is also necessary to distinguish between online and offline gaming and related licences.

To obtain the licences, it is necessary to participate in public tenders and obtain the relative titles. For some types of licences for physical gaming, authorisations from the public safety authority are also required. All licences entail a lengthy process and, therefore, there are no licences readily available.

The duration of the licence varies according to the type of game and is sometimes extended with specific regulatory measures.

There are the following requirements for public gaming operators:

  • possession of authorisations and licences;
  • anti-mafia certification; and
  • integrity and reliability requirements.

These requirements are necessary for both land-based and online gaming and must also concern the components of the companies.

For licence applications, the timescale varies according to the type of licence, the progress of the calls for tender, the necessary bureaucratic requirements and the completion of the checks. Generally, it takes several months.

The fees associated with licence applications vary according to the type of licence.

The applicable annual fees vary according to the type of licence.

The licence requirements of a premises include the state concession issued by the ADM following the participation in and awarding of a tender, and authorisation pursuant to Articles 86 or 88, TULPS.

As for the authorisation pursuant to Article 86, according to the TULPS, public rooms for lawful games cannot be exercised without the commissioner's licence.

With reference to the automatic, semi-automatic and electronic devices and devices referred to in Article 110, paragraphs 6 and 7, the licence is also necessary:

  • for production or import activities;
  • for distribution and management activities, even indirect; and
  • for installation in commercial or public establishments other than those already in possession of other licences referred to in the first or second paragraph, referred to in Article 88, or for installation in other areas open to the public or in private clubs.

As for authorisation pursuant to Article 88, the TULPS establishes that the licence for the exercise of bets can be granted exclusively to concessionaires or subjects authorised by Ministries or other entities to which the law reserves the right to organise and manage bets, as well as to subjects appointed concessionaire or by the holder of the authorisation under the same concession or authorisation.

Regarding recent or forthcoming changes to the land-based gambling sector, see 3.1 Key Legislation.

Regarding the use and application of B2C licences, the 2017 data is a reference point. In 2017, 2.2 million Italian users carried out at least one online bet (up 22% compared to 1.8 million in 2016).

Sports bets involved the largest number of players, with approximately 1.7 million active users (up 26% compared to 2016).

Casino games registered about 900,000 users (up 17% compared to 2016), followed by poker, 600,000 (up 9.0% compared to 2016) for tournaments and 500,000 for cash games (up 6.0% compared to 2016).

Analysing the number of game accounts at the end of 2017, about 8.2 million had been opened in Italy (equal to more than two accounts for each active player), and total collection in 2017 reached EUR26.9 billion, with an average annual growth rate (CAGR) of 23.3% between 2014 and 2017.

The payout average for the year was 94.9%, with EUR25.6 billion in winnings.

At the end of 2019, Italy awarded concessions for the provision of online gambling services in the country and the ADM communicated the list of candidates authorised to operate in the local market with licences valid until 31 December 2022. The list includes the betting operator Lottomatica, as well as the local subsidiaries of international companies such as Bet365, The Stars Group and GVC Holdings, among others.

The ADM has awarded up to 66 concessions.

Italy planned to start the application procedure for licences as early as the autumn of 2017. However, the ADM began accepting requests from interested operators in January 2018.

The regulatory body has limited the number of concessions available to 120, providing for massive interest from local and international companies. However, it received 80 applications from around 70 operators at the end of the application process. A license for the provision of online gambling services in Italy is priced at EUR200,000.

The bans on gambling advertising in Italy have undoubtedly generated repercussions on the country's regulated market.

See 6.2 B2B Licences (Suppliers, Software, Etc).

There is no legislation on white labels specifically applicable to the gaming sector.

The Italian market is one of the most important in online gaming, presided over by international players (divided between those focused exclusively on online gaming and those who occupy leadership positions in the offline channel and are expanding their offer in the online one) such as Bet365, William Hill, GVC Holdings, Paddy Power, Betfair, The Stars Group, Kindred (formerly known as Unibet) and 888 Holding.

The main local operators are Lottomatica (which has a monopoly on all the games connected to the lotteries), SNAI and Sisal.

As regards the market shares in the sports betting segment (main Italian segment), the scenario sees a highly fragmented market, with six large players dominating the market with more or less similar market shares, followed by Bet 365 and other players (representing approximately 20% of the market).

Advertising

With the Decree-law No 87 of 2018 (converted into Law 9 August 2018, No 96) was introduced an absolute for advertising games and bets, including sponsorships and forms of indirect advertising. In particular, Article 9 concerns the prohibition of any form advertising, even indirect, relative to games or bets with winnings of money, regardless of the medium used (radio, TV, press, internet, etc), including sporting events, cultural or artistic. Regarding sponsorship of events, activities, events, programmes, products or services, the ban came into force from 1 January 2019.

Tax Revenues

In any case, Italian online gaming is among the most important and the second in Europe after British online gaming. The online sector in 2017 recorded a collection of EUR27 billion (an increase of about 82% from 2013) and contributed to tax revenues with approximately EUR305 million; today the online segment represents only 7% of the total gaming market but, in the medium term, factors such as the increase in the penetration of mobile and the development and dissemination of faster and faster internet networks could bring it to be the main segment of the market.

There are technical measures to protect consumers from unlicensed operators, avoid infringements and protect payments. In particular, the ADM obscures unauthorised sites and there is a list of such unauthorised operators.

The ADM "has the primary objective of ensuring players a legal and responsible gaming environment, regulated and monitored constantly, and guaranteeing responsible gaming, in particular protecting minors and vulnerable groups sensitive to phenomena such as problem gambling". Gaming dealers are therefore asked to adhere to the guidelines drawn up by the ADM, in order to guarantee healthy and responsible gaming, in full respect of the health of the players. Further, there is a brand that wants to differentiate legal gaming sites from illegal ones, in order to protect the operators themselves as much as possible and to guarantee, above all, the health of the players and their safety.

The main methods to combat gambling addiction and to encourage legal and responsible gambling are detailed below.

Exclusion

The player can be excluded from the gaming account, ie, they can temporarily suspend their account when they realise that the situation is becoming problematic. With this option, access to the specific bookmaker's site will be blocked, and he or she will therefore be prevented from playing and also from making money deposits. The block for the user can be temporary, but also indefinite.

Independent Limitation

The second method is the possibility for the player to independently limit the maximum spending budget. This option can be decided upon registering on the operator's site and is not final (in the sense that the maximum limit can be changed from time to time, depending on the needs). The limits are relative to the week (therefore calculated from Monday to Friday), and the decision on the maximum spending budget is applied within one week of the modification itself.

Gambling Addiction Support

The third counter tool is a free telephone number that can be used in an absolutely anonymous form, to ask for help and to understand how to solve a gambling addiction.

The Responsible Gaming Portal

The fourth tool is the possibility of consulting the Responsible Gaming portal, a free service, managed by professional consultants who offer an assistance service. The service consists of a team of professional psychologists, flanked by other consultants specialised in psychiatry, law, etc.

Operators must take all measures aimed at:

  • distinguishing between legal and illegal gaming, contrasting, with warnings and information, the enjoyment of gaming controlled and guaranteed by the state to the negative consequences of illegal gaming;
  • disseminating, through various channels, measures to raise awareness of responsible gaming conduct to protect players, providing information about the potential risks of gambling, self-protection measures for players, insertion of tests for the purposes of self-assessment of their approach to the game/bet, and reference within the site to the web page of the ADM dedicated to "safe gaming";
  • guaranteeing maximum transparency regarding the rules and the probability of winning;
  • providing all the useful, essential and simple tools to ensure that the player can express any complaints; and
  • protecting minors, clearly specifying the ban on minors under the age of 18.

With reference to anti-money laundering and risk mitigation legislation, of primary consideration is Article 52, paragraph 4, of Legislative Decree 21 November 2007, No 231, as amended by Legislative Decree No 90 of 25 May 2017 implementing Directive 2015/849 of the European Parliament and of the Council of 20 May 2015, relating to the prevention of the use of the financial system for the purpose of laundering the proceeds of criminal activities and financing terrorism.

Without prejudice to the provisions of Legislative Decree 231/2007, with regard to the obligations of identifying customers, verifying possession and checking the permanence, during the course of the relationship, of the reputational requirements of distributors and merchants, pursuant to Article 52 of the aforementioned decree, the guidelines for the aid of gaming concessionaires may be considered as minimal as the concessionaire has the possibility to adopt any further measures. Furthermore, the same may be subject to a joint application as the criteria identified in the annex can also be used simultaneously, or according to a pyramidal approach.

Control Procedures and Systems

Gaming concessionaires adopt adequate control procedures and systems to mitigate and manage the risks of money laundering and terrorist financing. The procedures and control systems must be aimed at verifying the correct activity, provided for by national and EU legislation, to reduce the risks of money laundering and terrorist financing, also carried out through distributors and merchants, for all reasons contracted.

The procedures and control systems are also adopted taking into account the national analysis of the risk of money laundering and terrorist financing prepared by the Financial Security Committee and, in particular, are adequate to the risks of:

  • specific types of games;
  • the specific geographic areas in which the gaming offer exists;
  • the specific customers of the point of sale; and
  • the impossibility or difficulty in identifying the customer in the case of:
    1. reluctance to provide documents;
    2. illegibility or incompleteness of the documents provided at the time of customer due diligence; and
    3. divergence between the player identified at the time of the bet and the person who proceeds to collect the winnings.

Gaming concessionaires adopt procedures to detect compliance, by distributors and merchants under any contractual terms, with the standards and safeguards adopted in order to prevent money laundering and terrorist financing. In the concession agreements in the sectors envisaged, they adopt procedures to verify the permanence, during the course of the relationship, of the reputational requirements of distributors and operators, suitable for guaranteeing the legality and correctness of their conduct.

Anti-money Laundering

Following the adoption of the "Register of distributors and merchants" referred to in Article 52 bis of Legislative Decree 21 November 2007, No 231, as introduced by Article 1, paragraph 1060, of the Law of 27 December 2017, No 205, the concessionaire is in any case prevented from joining contractually, or maintaining an already existing contractual relationship, with a person liable for failure or incorrect fulfilment of anti-money laundering obligations. Dealers must take care of the preparation and updating of the personnel assigned to the following activities:

  • customer due diligence;
  • risk analysis (subjective and objective profile);
  • adequate conservation of the acquired data and documents;
  • customer profiling; and
  • correct data collection for the purposes of suspicious reports and/or objective communications.

Likewise, these duties must also be executed by managers and operators who make use of employees or appointed third parties for their activities. The concessionaires communicate to the Customs and Monopolies Agency the data provided for in the Electronic Anti-Money Laundering Service, which carries out the related control activity.

The releveant agency is AGICOM. The Communications Authority is an independent authority, established by Law 249 of 1997.

With reference to advertising, the Italian legal system distinguishes between two areas of activity: "above the line" (meaning by this expression the entire sector of advertising sales in the media, including the internet) and "below the line" (considering all the activities of communication that do not use mass media).

Decree-Law No 87 of 2018 (converted into Law 9 August 2018, No 96) introduced an absolute for advertising games and bets, including sponsorships and forms of indirect advertising. In particular, Article 9 concerns the prohibition of any form of advertising, even indirect, relative to games or bets with winnings of money, regardless of the medium used (radio, TV, press, internet, etc), including sporting, cultural or artistic events. Regarding sponsorship of events, activities, events, programmes, products or services, the ban came into force from 1 January 2019.

The ban on advertising for paid games applies to the subjects identified in Article 9, paragraph 2 of the decree, having their registered office, including secondary offices, in Italy. The prohibition also applies to subjects with registered offices abroad, if they have received the concession for the offer of paid gaming in Italy from the Customs and Monopolies Agency and/or have been authorised to provide audiovisual media services in Italy.

The following are excluded from the prohibition:

  • business-to-business commercial communications, including those disseminated in the specialised press;
  • the organisation of paid gaming fairs intended only for sector operators;
  • corporate social responsibility communications, such as information campaigns on games that are strictly forbidden and those that are allowed but prohibited for minors, on the risk factors to which players called "problematic" are exposed, on the values related to legal gambling, information on legal gambling, the risks of usury connected to pathological gambling, the activation of training courses on gambling addiction reserved for gambling operators, the provision of cautions towards the problematic online platforms dedicated to users in order to offer help in the case of compulsive gambling), without displaying the brand or logo;
  • “cause-related marketing” communications, made in the form of a summons from the concessionaire as the lender of a specific project or initiative of a social and charitable nature, without displaying the brand or logo;
  • the use of a brand that identifies, in addition to gaming services with cash or gambling prizes, further activities, having an autonomous nature, provided that there is no ambiguity about the object of the promotion and in this there are no elements evocative of the game except for the mere name of the supplier; and
  • the teleshopping of paid gaming goods and services if both of the following conditions are met:
    1. the paid gaming offer on television represents the subject of the concession for the exercise of the paid gaming offer issued by the Customs and Monopoly Agency; and
    2. the teleshopping is aimed exclusively at the conclusion of the game contract, consists of the mere execution of the game itself and does not contain any reference or has a promotional nature.

The promotional value of teleshopping is, in any case, presumed if it is broadcast within a generalist or semi-generalist television schedule.

Failure to comply with the provisions in question entails, in addition to the penalties already provided for in Article 7, paragraph 6 of the Balduzzi Decree (from EUR100,000 to EUR500,000), the application of a pecuniary administrative sanction of 5% of the value of the sponsorship or advertising, not less than, for each violation, the amount of EUR50,000 to be paid by the client, the owner of the vehicle or site of diffusion or destination of the organisation of the event or activity.

Acquisition and change of control of gaming companies must take place in compliance with the aforementioned anti-money laundering legislation.

See 10.1 Disclosure Requirements.

See 10.1 Disclosure Requirements.

Regulatory bodies can:

  • declare the forfeiture of the concession and revoke concessions and licences in the event of violations by the operators or in the event of the lack of the fulfilment of the requisites of the current legislation;
  • request payment of concession fees, plus penalties and interest;
  • enforce the sureties issued by the concessionaires;
  • block unauthorised gaming sites; and
  • act for any compensation for damage.

The sanctions are applied by issuing administrative measures, which can be contested by the interested party before the judicial authority.

The enforcement of administrative sanctions is very frequent.

The penalties are applied by issuing administrative measures, which can be contested by the interested party before the judicial authority.

Due to COVID-19, social gaming has developed considerably.

In Italy, there have been esports since 1980 but, due to bureaucracy, a lack of important sponsorships, inadequate internet lines and an unsuitable culture, esports have not yet reached the levels that can be found abroad. In 2014, a change occurred regarding competitive electronic games: the sports sector of ASI, a body recognised by CONI, began to take care of creating regulations in the sector, supporting the nascent ASD and Amateur Sports Associations. Recently, training schools have even sprung up for the roles of referees, coaches, analysts and esports commentators.

As with 12.1 Social Gaming, COVID-19 has caused the popularity of fantasy sports to expand.

As with social gaming and fantasy sports, the popularity of skill gaming has risen due to COVID-19.

Compared to the traditional gaming industry, the blockchain gaming niche is still quite new and relatively small. Despite this, there are hundreds of decentralised applications (dApps) and video games developed on blockchain networks.

See the previous sections in 12 Recent Trends.

There are different modalities and rates according to the various types of games.

The revenue for the tax authorities from the sector is both non-tax and fiscal. In the first case, the tax levy coincides with the residual tax margin, which is obtained by subtracting from the total amount of the bets (collected) the winnings paid to the players and the premium due to the manager of the gaming point. This withdrawal only applies to lotto, instant lotteries and delayed draws.

The revenue generated by all other types of gambling is classified, on the other hand, among tax revenues.

PREU

Article 39, paragraph 13, of Decree-Law No 269 of 2003 established the single tax levy (PREU), originally set at 13.5% of the amounts wagered, which applies to amusement and entertainment machines suitable for lawful gaming identified by Article 110, paragraph 6, letter a), the so-called amusements with prizes (AWP, or new slot) and letter b), the so-called video lottery terminals of the consolidated text of public safety laws. These are devices equipped with a certificate of conformity issued by the Ministry of Economy and Finance – Autonomous Administration of State Monopolies and compulsorily connected to the telematic network, new slots, and those belonging to the telematic network that are activated only in the presence of a connection to a computer system of the network itself, video lottery terminals.

Levy

The amount of the levy has been increased several times over the years. Article 9, paragraph 6, of Decree-Law No 87 of 2018 (the so-called Dignity Decree) increased the PREU on the aforementioned devices, setting the rates in the following way:

  • 19.25% (AWP) and 6.25% (VLT) of the amount of the amounts wagered starting from 1 September 2018;
  • 19.6% (AWP) and 6.65% (VLT) from 1 May 2019;
  • 19.68% (AWP) and 6.68% (VLT) from 1 January 2020;
  • 19.75% (AWP) and 6.75% (VLT) from 1 January 2021; and
  • 19.6% (AWP) and 6.6% (VLT) from 1 January 2023.

Paragraph 1051 of the 2019 budget law subsequently increased the aforementioned rates by a further 1.35% for new slots and by 1.25% for video lottery terminals as of 1 January 2019. A technical report relating to the 2019 budget law should bring an increase in revenue for the years 2019-20 equal to EUR616.9 million and EUR614.9 million respectively.

Article 27, paragraph 2, of the Decree-Law of 28 January 2019, No 4, modifying the aforementioned paragraph 1051, establishes that the increase in the rates applicable to the new slots is equal to 2%. The latter increase, according to the technical report of the provision, should bring a further increase in revenue of EUR154 million on an annual basis. Further, Article 31 of the aforementioned decree also establishes that for 2019 the payments due with reference to the single tax levy for the first, second and third instalments relating to the sixth two-month period are increased by 10% each.

Lastly, paragraph 731 of the 2020 budget law increases, with effect from 1 January 2020, the measures of the single-PREU tax levy on AWP (or new slot) devices as well as on video lottery terminals; the rates of the PREU are set respectively at 23.85% until 31 December 2020 and at 24% as of 1 January 2021, of the amounts wagered for AWP devices, and at 8.5% until 31 December 2020 and 8.6%, starting from 1 January 2021, of the amounts wagered for video lottery devices.

Single Tax (Imposta Unica)

The single tax, established by the legislative decree of 23 December 1998, No 504, applies to prediction competitions and bets of any kind, relating to any event, even if played abroad. The rates are variable between the various types of game; the tax base for prediction competitions is constituted by the amount of the sum paid by the competitor for the game net of fixed rights and compensation to the receivers, while for bets it is constituted by the amount of the sum wagered for each bet. The taxable persons are those who manage, even under concession, the prediction competitions and bets.

Article 4 of Legislative Decree No 504 establishes the rates, differentiated for prediction competitions (26.8%) and for different categories of totalisator bets (20%) and fixed odds (with rates ranging between 2% and 8% on different events from horse racing and for bets with direct interaction between individual players). For each type of totalisator and fixed-odds horse racing bet (except the totalisator bets on horse races called National Winner and National Coupled), the rate is equal to 15.7% of the withdrawal share established for each bet.

Lastly, the 2019 budget law has established that, starting from 1 January 2019, a single tax is established:

  • for remote skill games with cash prizes and for remote bingo games, to the extent of 25% of the sums that, according to the game rules, are not returned to the player;
  • for fixed-odds bets, excluding horse racing bets, in the measures of 20%, if the collection takes place on a physical network, and of 24%, if the collection takes place remotely, applied on the difference between the amounts paid and the winnings paid; and
  • for fixed-odds bets on simulated events referred to in Article 1, paragraph 88, of Law No 296, to the extent of 22% of the collection net of the sums that, according to the game rules, are returned in winnings to the player.

The same 2019 budget law also provided that, starting from 1 July 2019, the single tax on sports betting competitions, and sports and non-sports totalisator bets is abolished.

Entertainment Tax

The tax on entertainment was established by the Presidential Decree 26 October 1972, No 640, the tax base of which is given by the sum of the following elements:

  • the amount of the individual tickets sold to the public for entry or occupation of the seat;
  • increases in the prices of drinks or services offered to the public (eg, cloakroom);
  • payments for the sales and provision of accessory services, which are compulsorily imposed; and
  • the number of subscriptions, proceeds from sponsorships and transfer of radio and television rights, contributions paid by anyone.

To the tax base thus determined, it is then necessary to apply the reference rate provided for the type of entertainment considered by the rate attached to the D.P.R. No 640 of 1972.

Tax Rate (Aliquota IVA)

The VAT rate, provided for in Article 74 of the D.P.R. 26 October 1972, No 633, is applied on the same taxable basis as the tax on entertainment and exclusively to games for which no cash prize is expected.

Finally, since 2012, by decree of the general director of the Autonomous Administration of State Monopolies of 12 October 2011, a levy has been introduced on the part of the winnings exceeding EUR500 for some games. Lastly, the Decree-Law 24 April 2017, No 50, has set this levy at 12% for some games: video lottery terminals, Vinci per la vita (Win for life), Vinci per la vita (Win for Life Gold) and SiVinceTutto SuperEnalotto, national lotteries with an instant draw, Enalotto and Superstar, and 8% for lotto winnings.

Sbordoni & Partners

Via Arenula, 16
00186 Rome
Italy

+39 06 683 4021

+39 06 683 2692

segreteria@studiosbordoni.com www.studiosbordoni.com
Author Business Card

Trends and Developments


Authors



Sbordoni & Partners has a team of six lawyers and two paralegals working from its headquarters in Rome. Its practice includes legal and business affairs advice and assistance on all major gaming licences in Italy, mergers and acquisitions, amicable resolution and management of disputes, international arbitrations, joint-venture agreements, drafting law proposals on gaming and betting, handling relations between main players and governmental agencies in introducing and utilising property rights on games and lotteries, and studies on new games projects (bets, lotteries, pool games). The firm also provides technical and legal advice to all major gaming licensees in Italy and abroad. Sbordoni & Partners has been working on legislative amendments of gaming law since 2000, the harmonisation of Italy’s new Penal Code with existing gaming regulations (statutes and decrees), a project promoted by the National Counsel of Economy and Labour, and “Amministrazione Autonoma dei Monopoli di Stato” for the drafting of "white papers" on gaming in Italy.

Future Prospects for the Development of Online Gaming in Italy

Thanks to technological developments, the gaming sector has seen an exponential growth in online gaming, accentuated, in recent times, by the emergency situation caused by COVID-19.

The lockdown and regulatory interventions aimed at the suspension and/or reduction of access to gaming points located in the territory, and, therefore, to the land-based game, have induced regular players to turn to online channels and beyond. The situation created by COVID-19 has also "developed" a new demand, from subjects who, forced to change their lifestyle habits due to the forced closure of commercial and play activities, for smartworking, etc, have appeared and been introduced in the world of online gaming.

And the phenomenon is certainly not transitory, given that, even with the hope that COVID-19 will sooner or later be eradicated or at least contained, it has left indelible marks in society, with both negative and positive effects in terms of awareness and organisation. It is likely that institutions and citizens will increasingly welcome the idea of developing online in work and leisure time. The "experiments" of recent times will have possible stable developments and the approach to online gaming will be favoured by this mindset as well as by increasingly sophisticated yet simple technologies, within everyone's reach.

Benefits of online games

Even before COVID-19, Italy had become one of the most virtuous markets in the sector thanks to a considerable simplification of the systems for playing online, and constant work to make this type of game increasingly safe and reliable.

As for online slots, unlike physical machines (AWP and VLT), they are controlled and regulated through software running at ADM (the Customs and Monopoly Agency, formerly AAMS), which, as for land-based gaming, “supervises” the operation of online gaming, through a system of concessions and through an intense and articulated activity of control of the gaming circuits. Therefore, if at least in the abstract it can happen that physical slot machines suffer criminal actions – they can, for example, be tampered with or rigged – this cannot happen for online slots, based on an encrypted digital system, which reproduces the reels, slot machines or video poker, with guarantees of safety and reliability.

But the online game also offers other guarantees to users, as there are jackpots and prizes linked exclusively to this type of circuit. Among the various games available online, the payout of online casinos offer the most advantageous percentages, with a daily jackpot and the possibility of accessing certain exclusive services, which are not found in the case of land-based gaming.

Those shown are the main reasons for the growth of online gaming in Italy, which, although in 2019 it stood at around 12% of the total of the public gaming sector (therefore an overall modest percentage), still constitutes a constant growth.

Usage growth

Compared, for example, to 2015, the percentage of users, both with regard to online casino rooms (which include all the main games and attractions, such as video poker, online slots, roulette, baccarat, digital bingo and blackjack) and poker rooms (poker cash and tournament poker), increased, from 7.5% to 12.3%, a figure that must be read in perspective and tells us how public online gaming has almost doubled its turnover (and income for the state).

Furthermore, another important aspect must be highlighted, namely the fact that over 75% of the spending in 2019 for online gaming resulted in an equally high percentage of winnings for players, a phenomenon that had never previously occurred, given that between 2012 and 2018 the maximum winning percentage was between 55 and 65%. The data has therefore contributed to attracting greater numbers of users and 2019, which had already been defined as a watershed year for the online gaming sector, brought surprising results.

As mentioned, all this has been facilitated by the considerable development of technologies that have helped to strengthen online gaming on mobile devices, and also browser games versions, playable without having to download anything on to your mobile device.

Legislative initiatives

In 2019 the Italian legislator took initiatives that led to significant changes. The so-called Dignity Decree (law decree 12 July 2018, No 87 and converted by Law 9 August 2018, No 96) has imposed bans on online gaming advertising (among others), resulting in important changes in the communication of online casinos. It has also opened the way to the possibility of accessing useful information to reduce the phenomenon of gambling addiction, an aspect that can only be seen as an advantage not only for consumers but also for the sector itself.

In other words, a more responsible and disciplined game gives greater guarantees of reliability and is destined to be more attractive and develop over time. Streaming services have also developed in Italy as far as video games are concerned, both in to access TV programmes and to play games through various platforms and devices. In general, experts predict an exponential increase in online gaming, in sectors such as gaming, gambling, betting, live sporting events and home entertainment, and which will likely culminate in 2023.

Regarding 2020 data, one of the main sources of information on the legal gaming market in Italy, namely AGIMEG (Agenzia Giornalistica sul mercato del gioco), which reported a 123% increase in spending on poker in its tournament version in March 2020 compared to the same month last year, as well as an increase of 88.7% for poker in cash mode and, again, for online casino spending there was a growth of 29.5%. This being said, online sports betting has obviously suffered a significant slowdown due to the suspension and/or cancellation of the main sporting events due to COVID-19.

Illegal gaming concerns

In this panorama, there is no shortage of concerns about the possible increase of a parallel market for illegal online gaming, as opposed to the public one, and precisely with reference to this aspect, the association called Public Notice, the network of local authorities and regions for civil training against the mafias, has published a vade mecum on online gaming during COVID-19 on its website, to disseminate information for the protection of users and encourage conscious and responsible online gaming.

However, a period of transition such as the current one, which includes the development of socio-economic phenomena alongside difficult and extreme situations, arouses legitimate concerns regarding the difficulties that arise for non-gamblers in recognising a legal site from an illegal one. This is seen as one of the main risks, especially for those who do not regularly frequent gaming platforms.

Against about 400 legal sites operating in Italy with a regular state concession, 1,042 illegal sites were blocked in 2018 (with over 260 million access attempts). In the five-year period 2014-18 there were approximately 3,300 illegal sites that were inhibited. And these are sites where there is often no filter for the access of minors, the security of personal and financial data is not guaranteed, and the payout is not respected.

The Customs and Monopoly Agency

The law enforcement action of the Customs and Monopoly Agency (ADM) is powerful, constant and widespread. First of all, the blackout of illegal sites, ie, those without proper state authorisations, is on the agenda in Italy. In addition, the Customs and Monopoly Agency constantly works to promote responsible and controlled gaming.

The ADM "has the primary objective of ensuring players a legal and responsible gaming environment, regulated and monitored constantly, and guaranteeing responsible gaming, in particular protecting minors and vulnerable groups sensitive to phenomena such as problem gambling". Gaming dealers are therefore asked to adhere to the guidelines drawn up by the ADM, in order to guarantee healthy and responsible gaming, in full respect of the health of the players. As a result, there is a brand that wants to differentiate legal gaming sites from illegal ones, in order to protect the operators themselves as much as possible and to guarantee, above all, the health of the players and their safety.

Combating gambling addiction

There are four main methods to combat gambling addiction, and to encourage legal and responsible gambling.

The first option is that the player can be excluded from the gaming account, ie, they can temporarily suspend their account when they realise that the situation is becoming problematic. With this option, their access to the specific bookmaker's site will be blocked, and they will therefore be prevented from playing and also from making money deposits. The block for the user can be temporary, but also indefinite.

A second option is the possibility for the player to independently limit the maximum spending budget. This option can be decided upon registering on the operator's site and is not final (in the sense that the maximum limit can be changed from time to time, depending on the needs). The limits are relative to the week (therefore, calculated from Monday to Friday), and the decision on the maximum spending budget is applied within one week of the modification itself.

A third counter tool is a free telephone number that you can contact in an absolutely anonymous form, to ask for help and to understand how to solve your gambling addiction.

The fourth tool is the possibility of consulting the Responsible Gaming portal, a free service, managed by professional consultants who offer an assistance service. The service consists of a team of professional psychologists, flanked by other consultants specialised in psychiatry, law, etc.

Operator measures

Operators must take all measures to:

  • distinguish between legal and illegal gaming, contrasting, with warnings and information, the enjoyment of gaming controlled and guaranteed by the state to the negative consequences of illegal gaming;
  • disseminate, through various channels, measures to raise awareness of responsible gaming conduct to protect players, providing information about the potential risks of gambling, self-protection measures for players, insertion of tests for the purposes of self-assessment by same of their approach to the game/bet, reference within the site to the web page of ADM dedicated to "safe gaming";
  • guarantee maximum transparency regarding the rules and the probability of winning;
  • provide all the useful, essential and simple tools to ensure that the player can express any complaints; and
  • protect minors, clearly specifying the ban on minors under the age of 18.

As a result, thanks to the system described, the prospects for further development of the public online game are more than good.

Sbordoni & Partners

Via Arenula, 16
00186 Rome
Italy

+39 06 683 4021

+39 06 683 2692

segreteria@studiosbordoni.com www.studiosbordoni.com
Author Business Card

Law and Practice

Authors



Sbordoni & Partners has a team of six lawyers and two paralegals working from its headquarters in Rome. Its practice includes legal and business affairs advice and assistance on all major gaming licences in Italy, mergers and acquisitions, amicable resolution and management of disputes, international arbitrations, joint-venture agreements, drafting law proposals on gaming and betting, handling relations between main players and governmental agencies in introducing and utilising property rights on games and lotteries, and studies on new games projects (bets, lotteries, pool games). The firm also provides technical and legal advice to all major gaming licensees in Italy and abroad. Sbordoni & Partners has been working on legislative amendments of gaming law since 2000, the harmonisation of Italy’s new Penal Code with existing gaming regulations (statutes and decrees), a project promoted by the National Counsel of Economy and Labour, and “Amministrazione Autonoma dei Monopoli di Stato” for the drafting of "white papers" on gaming in Italy.

Trends and Development

Authors



Sbordoni & Partners has a team of six lawyers and two paralegals working from its headquarters in Rome. Its practice includes legal and business affairs advice and assistance on all major gaming licences in Italy, mergers and acquisitions, amicable resolution and management of disputes, international arbitrations, joint-venture agreements, drafting law proposals on gaming and betting, handling relations between main players and governmental agencies in introducing and utilising property rights on games and lotteries, and studies on new games projects (bets, lotteries, pool games). The firm also provides technical and legal advice to all major gaming licensees in Italy and abroad. Sbordoni & Partners has been working on legislative amendments of gaming law since 2000, the harmonisation of Italy’s new Penal Code with existing gaming regulations (statutes and decrees), a project promoted by the National Counsel of Economy and Labour, and “Amministrazione Autonoma dei Monopoli di Stato” for the drafting of "white papers" on gaming in Italy.

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