22.12.2023

by Antoni Majewski

EGBA Raises Concerns Over Proposed Italian Online Gambling Decree

The European Gaming and Betting Association (EGBA) has voiced serious concerns regarding the new Italian decree on online gambling that is currently under discussion in the Council of Ministers. This decree, if passed, would introduce a significant restructuring of the online gambling sector in Italy, particularly in terms of license fees, and potentially conflict with EU law.

Europe

The proposed decree includes a staggering increase in the license fee for online gambling operations to €7 million, a figure that far exceeds fees in other EU Member States. This fee is a substantial jump from Italy’s 2018 license fee of €200,000 and is more than double the previously proposed fee of €2.5 million, which was never implemented. EGBA believes this increase is unjustifiable and significantly higher than necessary.

Potential Market Consequences

EGBA warns that such a high license fee could have detrimental effects on the Italian online gambling market. It is likely to discourage new market entrants and might force smaller existing operators out of the market. This could drastically reduce the number of licensed operators from 91 to possibly only 15-20. Such a scenario could inadvertently contribute to a growth in Italy’s online gambling black market, which is already one of the largest in Europe, valued at over €1 billion annually.

Revenue vs Market Health Trade-off

While the anticipated revenue from the proposed licenses could reach €105-140 million for the Italian state, EGBA suggests that a more moderate fee of €2.5 million could yield similar tax revenue without significantly harming market competitiveness. The association argues for a balance between generating revenue and maintaining a healthy, competitive market.

Call for Player Protection and Fair Competition

EGBA emphasizes that the primary objective of Italy’s gambling regulation should be player protection and fostering a fair, competitive market. The proposed fee increase risks undermining these goals by limiting competition and boosting the black market, which lacks adequate player safeguards. The association is urging the Council of Ministers to reconsider the fee increase and is committed to working with Italian authorities to develop a sustainable fee framework.

The current advertising ban in Italy, which benefits black market operators, is another point of contention for EGBA. The association proposes revoking this ban to allow for regulated advertising that protects minors and vulnerable groups while enabling licensed operators to promote their regulated offers.

Maarten Haijer, Secretary General of EGBA, commented, “The proposed increase in licensing fees is unparalleled and unheard of, it would make Italy the most expensive country in Europe to obtain an online gambling license. This, combined with the advertising ban, will make Italy a closed shop for new market entrants and lead to an exodus of existing licensees. We urge the Council of Ministers to reconsider the proposal, as it will make the country’s online gambling black market problem even worse, not better.”

Our Comment on the Article

The EGBA’s concerns about the proposed Italian online gambling decree highlight a critical issue in regulatory balance. While the Italian government seeks to generate revenue and regulate the sector, the proposed measures could have unintended negative consequences. The association’s call for a more moderate approach to licensing fees, coupled with the reconsideration of the advertising ban, is aimed at ensuring a more sustainable and competitive market that prioritizes player protection. This situation underscores the delicate balance governments and regulatory bodies must strike in the rapidly evolving landscape of online gambling.

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