Opinion: Italian tax regime is here to stay

There will be no additional taxes on online gaming in Italy according to the director general of the Italian gambling authority, Mr. Luigi Magistro, at the online gaming conference organized by the European Social and Economic Committee.

Mr. Magistro took a very wise position stating that the taxation in the online gaming sector needs to be low because this might be the sole effective measure against the competition from unlicensed operators. A low level of taxation may, as a consequence, be the most effective measure to push operators to comply with the Italian online gaming regulations.

Additionally, an increase in the taxation in the online sector would not bring relevant advantages to the entries of the State if it is considered that this sector represents only 2.2% of the tax entries generated from the gaming sector. Therefore, even a potential tax increase would not lead to a major advantage for the Italian Treasury.

This statement was followed by the publication by the Politecnico di Milano (i.e. the Univerisity of Milan) of the report on the Italian online gaming market in 2012 which showed EUR 750 million of spending with a slight increase compared to 2011 and with a growth of casino and poker games of 17.1% which makes operator looking at 2013 with a quite optimistic eye considering that online slots had been launched only in December 2012 where there was an increase in spending of 74.4% compared to December 2011.

However on the other hand, sports betting and bingo suffered a considerable loss, though this may be recovered through the launch of bets on virtual events, betting exchange games and especially by the coming into force of new regulations allowing the offering of sportsbetting games on events not included in the official AAMS schedule and new bingo regulations that should all happen during the course of the year. Indeed these new games will make the offering of games by Italian licensed operators equal to the one of the black market contributing to the potential reduction of the black market and therefore to the growth of the Italian licensed market.

Needless to say that this is a very good sign for the Italian online gaming market where rumors of tax increases have always been around. Also, it is good that Mr. Magistro stressed the need to limit as much as possible the competition from unlicensed operators in order to create a regulatory environment where all the operators act according to the same rules. Hopefully this speech will be followed by stringent measures against unlicensed operators.