Turnover tax causing Italian sportsbook decline
AAMS told it should consider testing a 20% GGR tax rate to arrest decline in online sports betting at a DLA Piper seminar
Italy’s gambling regulator was told to ditch its sportsbook turnover tax in favour of a levy on gross gaming revenues (GGR) to arrest a continued decline in sports betting spend by experts from DLA Piper and the University of Milan.
Speaking following a seminar organised by law firm DLA Piper earlier this week called ‘Sports betting crisis in Italy “ how to reverse the decline?’ DLA’s Giulio Coraggio told eGaming Review regulator Amministrazione Autonoma dei Monopoli di Stado (AAMS) should trial a 20% GGR tax in order to reinvigorate its flagging market.
According to DLA, remote sports betting spend in Italy has declined 22% from 173m in 2010 to 135m in 2013, in contrast to the UK which has seen a 63% increase in spend from 489m in 2009 to 776 in 2012.
Italy’s tax on sports betting turnover is currently set between 2% and 5%, depending on the number of possible outcomes, but the regulator has set a 20% GGR tax rate for exchange betting and virtual events.
During the seminar, in which AAMS head of remote gaming Franceso Rodano was present, the University of Milan presented a study which concluded the decline of the online sports betting market was largely attributable to the restrictive tax measures.
To highlight the point, the study said that figures it had obtained from AAMS showed operators paid an accumulative total of 2.7m in taxes in September 2012, despite a negative income of 1m.
“In my view, a testing phase of one year where a 20% gross gaming revenue tax regime would be extended to the online sportsbetting sector might show to the Government and regulator that such regime can allow operators to offer better odds also attracting players from the unlicensed market and therefore increasing the number of active players in the market that has been static in the last years,” Coraggio said.
He also made clear that a switch to GGR could increase payout rates, enabling customers to play for longer, while also increasing tax entries due to both a growing market and subsequent increase in marketing spend.
Italy also faces a battle in overcoming a sizeable black market which is estimated to be more than 50% of the online casino market.
In October, AAMS warned that it was considering licensing B2B gaming suppliers unless they halt their supply of games to operators operating in the country without an Italian licence.
AAMS were unavailable to comment on this story.