Gaming Law in Italy

In the last few years the gambling industry has developed considerably and despite the world economic crisis it’s still growing rapidly in Italy and in other countries as well.

As to the Italian specific situation, the industry’s turnover accounts to more than sixty billion Euros thanks to the State policy aimed at enhancing gambling though keeping a tough control on it so as to protect its economic interest and law and order as well, and to guarantee Operators and protect the so-called Consumers-gamblers.

In this framework, regulations are always evolving so as to improve gambling as a public service and also to give more chances to Operators and to those who want to enter the Italian gambling market.

The introduction of “Videolotteries”, “Skill games”, “On-line poker Tournaments”, “Cash Game Poker” and “On line Casino games” sent the Italian gambling market into turmoil.

In this connection some important tenders have been launched so as to grant new EU fully compliant licenses.

Precisely online poker cash and casino games will be active starting from 18.7.2011.

In 2010 the Videolotteries and Slot Machine market raised 32 billion Euros, and 20 billion in the first six-months of 2011.

A public tender will be launched by September 30, 2011 to license new Slot Machine and

Videolotteries Network Operators.  The existing ten concessionaires will be granted the renewal, but will be allowed to increase their present number of VLT’s (in a percentage between 7% and 14% of the AWP’s they – and the new Operators as well - will commit to install).  All new Operators, in addition to the other requirements set forth by the Regulator, shall pay 100 Euros as a one-off payment per machine, and the State will collect between 39 and 77 million Euros.  Each of the 380 thousand Slot Machines connected to historic licensees shall pay a fee; in total, in a three-year time the package is supposed to bring at least 2 billion Euros into the State’s accounts.

By 30.11.2011 a tender for live poker (live Texas hold’em) licences will also be launched; through a selection of the best offer submitted (by subjects who hold gaming licensees as under art. 24, paragraph 11, L.n. 88/2009, as well as those entitled to that under art. 24, paragraph 15 of the same law), the tender will award 1,000 9-year-long new licenses with an upset price of 100,000 Euros and a 3% tax on gross turnover of the gambling company – in compliance with the provisions set by the Italian Council of State.

This means that the tender will be reserved to present Italian gambling licensees and to gambling companies based in the European Union with a turnover of 1.5 million Euros in the last 2 years.  As to existing Poker Clubs, if the law will be approved, they will not be allowed to participate directly to the tender, but only act as partners of those to whom the license will be granted.

Two novelties will be brought in by the 2011 Budget Law – Law n. 220 of 13.12.10 the so-called Stability Law. These provisions are supposed to give the Treasury a 500-million euro revenue in 2011, and at the same time implement the fight against illegal gambling, allow a better control on the industry performance by the Authority and protect consumers, mainly minors.

From the fiscal viewpoint, the 2011 Budget Law rules that a “taxable person” is any unlicensed operator who manages “any kind of bets, tips or forecast with any means, computer included, on behalf of itself or third parties, even located abroad”; The Regulator aims discouraging illegal gambling practices and further protecting the Operators that are licensed on the Italian market and favour those who want to enter it.

The Stability Law also provides for an extraordinary control plan through which AAMS in conjunction with Guardia di Finanza (the Italian Financial Police) and SIAE (the Italian Society of Authors and Publishers) will carry out an overarching control activity (30 thousands controls at least) on online gambling, betting, and gambling through VLT’s and AWP’s, as well as activate specific monitoring systems on slot machines: a data base will be created with the number of machines, kind of premises where these machines are installed and the ownership.

As regards consumers’ protection, the Stability Law provides for tougher rules on the ban of cash games for minors and relevant tougher penalties for the owner and the gambling spots, as well as some measures adopted by the Authority to prevent, fight against and recovery of problem gambling as a consequence of compulsive gambling.

The Stability Law follows important regulations enacted by the Italian State in 2010 implementing the legislative decree n. 39/09, turned into law n 77/09 (that included new on line games like cash poker and casino games, and provided for the final regulation of the so-called video lotteries) and enacting the law for the implementation of the so-called community obligations n. 88/09 (providing for the expansion of the offer of online gambling, issuing 200 new licenses and regulating “live poker” and law n. 102/2009, providing for an “Extraordinary plan to fight against illegal gambling” and provisions on “the Granting of licenses on gambling” thus launching new procwedures for the granting of licenses on revenues, online gambling included, from national lotteries, instant win games, traditional lotteries, the so-called scratch cards, as well as, with reference to the so-called video lotteries, launching new procedures for the licensing of legal online gambling networks as provided in article 14-bis, paragraph 4, of the presidential decree n. 640/72 as amended from time to time.

In conclusion, the Italian gambling market will grow and develop further in the future, and that will entail an increase of the number of Italian and foreign Operators.  Recently the increase of bets was accompanied by a Payout increase – the return for gamblers –from 67.9% in 2007 to 72% in 2010.

Stefano Sbordoni is the founding partner of Studio Legale Sbordoni. Over many years of practice, Sbordoni has been in charge, amongst other things, of standardizing the game of Bingo, of overhauling the regulations on public tendering for the gaming industry, of leading the privatization of Instant Lottery, of coordinating the sale of lottery games in more than forty countries.  Studio Legale Sbordoni is today a leader in the legal and business affairs consulting arena on betting and gaming law, both directly in Italy and through a valid network of professionals, internationally. Studio Legale Sbordoni has been regularly involved in the drafting and development of legislation on public gaming.  Stefano Sbordoni can be contacted on +39.06.683.4021 or by email at segreteria@studiosbordoni.com