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Industry Dismay as Italy Approves €7 Million Online Gambling License Fee
By Shane Addinall Apr 09, 2024 IndustryThe decision by the Italian gambling regulator and the MEF to implement a 35-fold increase in online casino and betting licenses has industry pundits concerned about industry suppression and the rise of illegal gambling providers.The ongoing conflict between licensed online casino and betting operators in Italy and the gambling jurisdictions' Customs and Monopolies Agency (ADM) has been a significant issue over the past year.
This conflict, which has even involved the courts, has been a hot topic of discussion, particularly in relation to the Reorganisation Decree for Online Gambling proposed by the Ministry of Economy and Finance (MEF).
Mind-blowing New Online Gambling Fees
Despite vocal opposition from international casino industry watchdogs and licensed operators, the Italian government has signed the MEF’s proposed gambling decree review into power.
At the heart of this newly empowered decree is a new framework for the licensing and regulation of international online casinos. The framework includes a nine-year gambling license at a cost of €7,000,000 per concession. This fee is an astronomical increase from the €200,000 paid for the same concessions back in 2018.
The cost implications do not end there: In addition to this monstrous licensing payment, all online casino and betting providers will have to pay an additional fee of 3% of their gross gaming revenue (GGR).
This extremely expensive license is also limited to a single brand, which excludes operators who are used to running multiple sister casinos on a single license and software providers that offer white-label solutions.
Is This Greed or Simply Good Business?
With a massive upfront licensing cost and ongoing fees based on GGR (player wins and losses before any operating costs or banking fees have been considered), the ADM appears to be looking to hamstring the industry rather than encouraging it to flourish.
This opinion has some merit, as industry pundits have pointed out that the ADM called on the MEF to find a way to cut the number of licensed casino operators in Italy by at least half, despite its early 2023 attempts to encourage market growth. They argue that increasing the price of a single casino license by 35x will achieve this goal while still bringing in enough revenue to simulate a growing market.
ADM has projected that the Italian government will see a €350 million revenue increase over the next 24 months, despite the number of licensees expected to drop from eighty-three to less than fifty under the new regime.
Will Illegal Gambling Flourish?
On the surface, overseeing fewer licensees while increasing revenues by €350 million sounds like the smart choice. However, the reality of instant internet access, virtual private networks (VPN), cryptocurrency casinos and the high demand for player choice could make the region more difficult to manage.
Technology is advancing rapidly, far more rapidly than the ADM can act to counter whichever new app or tool will allow Italian players to access unlicensed casinos should they feel stifled by the country’s legal offering. The region's unlicensed casino sector has historically reached €1 billion, drastically reducing available legal options could see it surge passed this to unknown heights.
While the ADM and MEF have clearly done the math when it comes to optimising government revenues and their workload, it is unclear whether they have considered the dangers of driving players to black market casinos, where they do not have the protection and support afforded them when claiming casino bonuses and requesting withdrawals at approved venues.
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