Italian egaming tax reform facing delay
Legislation to tax all verticals on a revenue basis now unlikely to be passed until the end of the year
Italy’s plans to ditch its turnover tax and move to a gross gaming revenue model have been hit by a delay but should get the go-ahead before the end of the year, according to a leading gaming lawyer.
Last week Prime Minister Matteo Renzi declared the reform debate was “still not mature” as the initial deadline for the approval of the primary law passed.
However it is expected the comments should only delay the changes until December when it is anticipated the government will pass legislation in time for its next budget.
The amendments could have a far reaching impact on sportsbook operators with the introduction of a 20% GGR tax regime to replace the current turnover-based system.
Sports betting will also be further liberalised with operators allowed to offer a wider selection of customised markets and events.
And Italian gaming lawyer Giulio Coraggio from DLA Piper said the changes could see a period of rapid growth in Italy’s sports betting vertical.
“At the moment, some operators cannot afford to offer their dot.com odds in Italy because of the turnover-based tax regime,” Coraggio said.
“The 20% GGR tax, accompanied by a full liberalisation of the sports betting offering, will make the dot.it offering more equal to the dot.com offering, getting further market share from the black market and fostering the internal growth of the sector,” he added.
The GGR tax regime should also benefit bingo and poker, which like sports betting are taxed on turnover, but will have a minimal effect on casino which already operates on a GGR taxation system.
Even as operators await the changes there have been some promising signs for the market in recent months. Last week Italy’s casino market reported a 32% year-on-year increase in May to 26.6m, while sportsbook was up 22% to 21.3m with turnover more than doubling year-on-year to 239.1m.
The strong performances were credited to recent efforts to curb unlicensed activity and already implemented liberalisation around in-running betting.
However, Coraggio cautioned that there was still uncertainty over the scope of the reforms and said that there are still areas in which the regulator could go further.
One major gripe among operators is that the licence application window is currently closed, meaning operators wishing to acquire one must purchase an existing licence issued and the proposed reforms do not seek to redress this.