Italian advertising ban: Industry reaction

The Italian government has approved a blanket ban on all gambling related advertisements with effect from June 2019.

Contained within the so-called ‘Dignity Decree’, the legislation must now be approved by the Italian parliament within the next 60 days and could change over that period.

Framed as an exercise to stop the spread of problem gambling, the move made by the new Italian coalition government is a bold one, but is it one that will irreparably harm the Italian gambling industry?

Here’s what some of the key stakeholders had to say:

Stefano Sbordoni, partner and CEO of Italian law firm Sbordoni and Partners: “For me, drastically banning a state-authorised activity sounds contradictory.

It is a duty of any government to take care of whatever causes problems to the community, but on the other hand in any Government provision there should be balance between the need to protect and the needs of industry.

My feeling is that this debate on gaming and its pathological effects has been over stressed, and this decree is more a political statement than a real panacea.

I hope that an in-depth discussion between the interested parties will soon follow, to enable all the parties to obtain the results they all deserve.  For me, I found the idea of a total ban of communication on the web peculiar, particularly when the web itself is a communication tool”

Gambling industry analysts Eilers & Krejecik: “We believe this is a clear negative for the regulated online sector and may drive further consolidation. Revenue growth rates have been above 20% in the regulated Italian online market over the past two years and remain high through the first half of 2018, but it would be realistic to expect the ban to reduce these if it comes into effect as promised.

“Online gambling is heavily dependent on marketing due to the relatively high rates of churn and short player lifetimes especially in the casino sector. Sports betting and poker operators will be better placed with player lifetimes tending to be considerably longer than those in the casino vertical but all should be impacted.

“The likes of Playtech/SNAI, IGT/Lottomatica. GVC/Eurobet could gain market share as a result of any advertising bans and long-established online brands such as PokerStars and bet365 may also feel some benefit from this, but it’s not at all clear how much this would be counteracted by the inability to market to existing players to drive activity and to acquire new players.”

Investment bankers Goodbody Gaming & Leisure: “Banning advertising will have a negative impact on market growth rates and is something that will definitely slow the rate of online penetration going forward. It makes acquisition very difficult.

“This will severely impact the ability for online only brands and makes new entrants impossible. 888’s Italian business has been performing strongly. WMH and PPB both have Italian exposure but it is very small from a group perspective. In terms of those with a retail presence, given the extensive retail presence of Snaitech (which Playtech has acquired) and GVC’s Eurobet businesses they are in a good position to take online share.”

Moreno Marasco, President of Logico: “We believe that the Government acted with all the best intentions, in order to protect customers from compulsive gaming disorder, which is obviously our aim as well; however, that cannot be achieved by removing any form of advertisement, clearly required to distinguish the legal operators from the illegal.

“Demand for gaming and gambling exists regardless of advertisement, Government, Concessions and Operators, and this move will be cancelling the results achieved by more than a decade of online gaming regulation if we don’t take this opportunity to transform the total ban into a crackdown on harmful and deceitful advertisement – which has always been our intention and the LOGiCO Social Ad was only the first initiative on that front.”

Mr Green CEO Jesper Kärrbrink, speaking at the World Executive Gaming Summit: “I will be extremely surprised if gambling activity actually goes down in Italy.

“Players will find a way to play. They always do. So I think we have to rely on the entertainment aspect of our offering. And while short term this ban is of course a headache, long term I think it will be good for our industry.”