Opinion: Regulator's actions are improving the Italian online market
DLA Piper counsel and gaming lawyer Giulio Coraggio believes the remote Italian market is now becoming more attractive
The 226m of gross gaming revenue (GGR) generated by the Italian online casino market last year may have been considerably far lower than the initial expectations of the Italian gaming regulator, Agenzia delle Dogane e dei Monopoli (AAMS).
But this shortfall may have been the reason which encouraged AAMS to start a strong campaign against casino game suppliers that, according to their view, offer the same games both to licensed operators and non-Italian licensed operators targeting Italian players.
Apparently this was one of the topics of discussion during the meeting that recently occurred in Rome among the regulators of the main European jurisdictions with the aim of formulating a common strategy against the black market.
Indeed, Italian criminal laws against online gaming in absence of a local licence apply only to operators while suppliers merely act as their subcontractors and are not subject to the criminal prohibition “ a fact recently confirmed by the Italian Supreme Court.
However, the very aggressive approach by the Italian regulator is expected to see some game suppliers attempt to prevent their operators from offering games to Italians through their dot.com platform. And if such expectations are met, the black casino market which currently is estimated to be the same size as the regulated market might well be forced to join the licensed market, potentially doubling its size.
This also means that operators with a substantial number of Italian players on their dot.com platform will be forced to obtain an Italian licence unless they want to lose their players. And this happens in a quite a good time for operators since the recent liberalisation of the sports betting market, with the removal of restrictions on the types of bets and events to be offered, together with potential change of the applicable tax regime is setting quite favourable market conditions.
Indeed the current turnover based tax regime for sports betting will hopefully be replaced during the course of the year by a 20% GGR tax regime (a levy already in force for casino and cash poker games) as part of measures to be adopted by the Italian Government enforcing the so called delegation law which is expected be approved by parliament in the next few days.
Such expected changes will follow the launch of bets on virtual events, which occurred at the end of 2013 and expected to generate 1bn between the online and land-based offering. And also the upcoming opening up of the betting exchange market together with the liberalisation of the bingo offering whose current regulations are very restrictive might make the market more and more attractive for operators.
However since the licensing window is now closed, the sole option to acquire a licence is to purchase it from a current licensed operator. This is creating an interesting second-hand market for both buyers and sellers where good deals can be closed for both parties. But the timing might be of essence given the current uncertainty.