The European Gaming and Betting Association (EGBA), the Brussels-based trade association for EU licensed online gaming and betting operators, has called out Italy’s gaming regulator, Agenzia Delle Dogane e Dei Monopoli (ADM), for its plans to introduce harsh changes in the local gaming sector. The changes in question are outlined in a recently published draft law that proposes reducing the number of online gambling licenses from the current 120 concessions to 40.
Italy’s former 5Star-DP coalition government first introduced the proposal to reduce the number of internet gambling licenses in 2019 after an overhaul of the ADM. Following the proposed changes, the ADM had been instructed to initiate a slew of sweeping industrywide reforms for both land-based and online gaming facilities. These measures were attached to the state’s 2020 Budget Law decree as a draft but didn’t make the cut.
However, according to a new EGBA report, Italian authorities in the recently formed government have picked up the baton and are said to have continued working on the proposed changes.
Italian Players Could Be Forced to Turn to Black-market Gambling
On top of reducing the number of licenses drastically by two-thirds, other planned changes include hiking licensing fees ten-fold to a whopping €2.5 million by 2023. Further, online gambling licenses would be awarded via an auction process rather than via a fixed licensing fee structure, as is the case in other EU Member States. The proposed licensing overhaul is set to take effect at the end of the current licensing term, on January 1st, 2023. Should they come into effect, they will then apply for a 9-year period.
This prohibitively high concession tariff and the drastic cutback in the number of online gambling operator licenses will deal a massive blow to an otherwise robust local market. As a result, EGBA fears that the feasibility of the licensed and regulated online gambling market in Italy will be weakened.
Owing to the hiked fees, unregulated operators would certainly have more lucrative offers and betting odds as they won’t be feeling the pinch of blown-up costs of doing business legally. The consequential effect of a subverted regulated market is that online gamblers in Italy would end up falling prey to black-market gambling. In that case, the online gamblers will no longer be protected by the state’s gambling laws – which is divergent from the objective of Italy’s regulated online gambling sector.
EGBA: Italy’s Authorities Aren’t Following Due Process
In its statement to Italian authorities, the Brussels-based trade body recognized that the EU Member States have “the discretion, within certain boundaries” to determine how much a gambling license would cost in their jurisdictions. However, the EGBA revealed that contrary to EU law under the ‘notification directive,’ Italian authorities haven’t notified the European Commission. The notification practice was put in place to ensure new national laws are compliant with EU law before they come into effect.
EGBA Secretary General, Maarten Haijer, reminded Italian of their responsibility to send the draft legislation for scrutiny by the European Commission in the following statement:
“We have asked the Italian authorities to duly notify the draft legislation to the European Commission. Notification is required by European law, and failure to do so will render the law inapplicable to Italian-licensed companies and its citizens. The Commission’s careful scrutiny of this proposal is needed, also to make sure that the draft legislation will not be contrary to the consumer protection objectives of the Italian online gambling legislation”