Italy’s take on licensing framework for online gambling

Lea Hogg 2 months ago
Italy’s take on licensing framework for online gambling

Italy’s has recently unveiled a comprehensive framework for online gambling licenses, marking a significant shift in the country’s approach to regulating the iGaming industry. This new framework, published as an amendment to the ongoing ‘Reorganization of Gambling’ legislation, aims to resolve longstanding legal disputes between the ADM (Italy’s Customs and Monopolies Agency) and licensed operators over conflicting terms of license renewal. Previously, government intervention had prevented the ADM from terminating licenses due to expire in 2023 and 2024.

Increased concession fees and regulatory changes

The new settlement will authorize new online gambling concessions by the end of 2024, with licenses limited to nine years and priced at €7 million ($7.5 million). This represents a significant increase from the previous license fee of €200,000 ($214,834) set in 2018, requiring Italian online gambling operators to pay a premium 35 times higher than before. The Ministry of Finance (MEF) justified the increased fee, arguing that it reflects the evolving landscape of Italian online gambling since 2011. The sector is currently dominated by conglomerates such as SNAI, Flutter Entertainment, Lottomatica, Entain, and SKS365. However, online gambling trade body Logico has contested the price hike, viewing it as a means to suppress competition and satisfy the ADM’s demands to reduce the number of operators in the market. Under the new framework, each license will also be subject to an annual fee of 3 percent of the Gross Gaming Revenue (GGR) after taxes.

Operators are further restricted to operating one app per gambling product and one website per concessionaire, with no affiliated ‘skins’ websites permitted. The Ministry of Economy and Finance estimates that at least 50 operators will apply for the concession to renew their licences.

The MEF supports the government’s framework and projects gaming-related taxes to increase by €350 million ($376 million) over the next two years (€200 million in 2024 and €150 million in 2025). Concession fees alone are expected to generate €100 million ($107 million) in new annual revenue. The framework also introduces new technical requirements for gambling licences. Applicants must ensure that platforms have playing limits set by customers and send warning messages when these limits are close to being exceeded. The ADM will also be granted additional powers to combat unlicensed online gambling, including measures such as payment blocking.

In related news, the government is set to launch a tender to operate Italy’s Lotto Euro game, currently managed by IGT until November 2025. Lotto Euro anticipates a €7.7 billion annual turnover after 2025 and offers approximately €200 million in net annual revenue for nine years. The government has set a starting bid for the Lotto tender of €1 billion, with payment installments specified for when the tender is awarded and for the following years of its contract. This move signifies the government’s commitment to expanding and diversifying the country’s gambling industry while ensuring fair competition and consumer protection.

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