Opinion: Gambling advertising in Italy is here to stay

“Can we afford to lose €71m a year in revenues?” This is the likely thought of major Italian TV companies after having read about the Senate approving an amendment of the so called “delega fiscale law” and in turn providing the potential for a gambling advertising ban during TV and radio programs.

The bill, which still needs to be approached by the second chamber of the Parliament, refers to “an introduction of an advertising ban during radio and TV programs in compliance of the principles prescribed by European authorities on the protection of minors with reference to games with cash winnings that can induce to compulsive behaviors“.

This provision generated concerns from TV companies, which in 2012 gained €71m of revenues from TV gambling advertising, and gambling operators which themselves look to TV advertising as the most effective tool to market their products.

However, some recent reporting of the matter has lacked sufficient background information and has led some operators to even think whether they would need to immediately rearrange their marketing strategy.

Indeed, it is good to mention that the “delega fiscale law” in the process to be approved will not introduce any provision directly enforceable towards the public. On the contrary, it will merely empower the Government to adopt the measures based on the principles set forth by the Parliament within the next 12 months.

The Government will have broad discretion in implementing such principles and in this respect the reference in the provision above to “the principles prescribed by European authorities on the protection of minors” is likely to lead to restrictions of TV and radio gambling advertising during specific time slots. This is similar to those already prescribed in many other jurisdictions and even in Italy gambling advertisements cannot be broadcast 30 minutes before and after TV programs addressed to minors.

The above conclusion is even more likely if it is considered that the Italian gaming licence regime prescribes that the State through the Italian gambling regulator grants a licence (the so called “concession“) awarding a “right” and an “obligation” to offer games during the licence term against the payment of an amount that in the case of land-based AWP and VLT licenses is very high.

As a consequence, a restriction on TV and radio gambling advertising subsequent to the issue of gambling licenses and to the payment of the relative price might lead to claims from operators that Italy cannot afford at the moment.

Given the above, I do not expect considerable changes in the gambling advertising sector. On the contrary the “delega fiscale law” will be a major opportunity to set up a new tax regime for most of the games which hopefully will lead to a GGR based tax regime for sports betting, something which is the subject of considerable debates at the moment.

Therefore I have very large expectations for the future rather than concerns, also because the entire gambling sector generates tax entries of around €10bn a year and I wonder which Government can afford such loss during the current economic crisis.

Giulio Coraggio leads the Italian gambling practice of law firm DLA Piper.

In other news:

– William Hill revamps legal advisory panel

– “Historic day” as Dutch egaming bill passes Council of Ministers