Italian Senate passes new gambling taxes, hitting industry hard By Luke Haward, CDC Gaming Reports December 30, 2018 at 6:05 am Now that last week’s proposed amendments to Italy’s budget have been confirmed and passed by the Italian Senate by a rather resounding 167-to-78 margin, Italian gambling firms must be feeling as if the government is adding insult to injury. A near-total ban on advertising within the country is due to come into law on the 1st January, and now here are a new series of tax hikes as well, including a 5 percent hike for online casino companies, meaning that they can now be taxed up to 25 percent of gross gambling revenue (GGR). Other tax increases include a 2 percent rise – up to 24 percent GGR – on sports betting and a 2 percent rise to 20 percent for land-based gambling services and virtual betting. All the tax codes in the gambling sphere are seeing some rise; even land-based gambling machines seeing a 1.25 percent rise in tax on revenue. Maximum payouts are also being lowered somewhere between 68 percent and 84 percent, which is expected to shrink overall play time. Industry pundits and operators are, unsurprisingly, up in arms, complaining that this will be too punishing for an industry that had flourished up until this year. Many firms will take a major hit under the new codes. Playtech, for example, who acquired the Italian firm Snaitech in a major move earlier this year, have announced that the proposed tax changes will cost them between €20 and €24 million in the year ahead. It is expected that the tax rises will bring in an estimated €770 million to the Italian government, much of which will be accounted for by land-based operations. The message from the Italian government has been consistent, loud and clear, and the cabinet has not been shy about its reasons for imposing these new laws. Deputy Prime Minister Luigi Di Maio has said that the intention of the tax adjustments was to “take money (back) from those who in recent years had taken too much money from Italians.” The new administration has been quite clear from the beginning that what they intend is a major overhaul of the gambling industry; the Dignity Decree, which banned gambling advertising, was widely understood to be simply the first in a series of planned anti-gaming moves. With these new tax rates, we are starting to see these additional moves being played out. It was also announced in early November that scratch cards in Italy will soon carry mandatory health warnings. Italy is thus far the only Western European nation to have taken such strict measures to curtail the activity of the gambling industry, but they are not alone in showing signs of concern over gambling advertising saturation, the normalisation of gambling for children, and the overall social impact which the industry is having. There has been talk amongst the major operators in the UK of a self-imposed live sports broadcast ad ban, Belgium is bringing in new restrictions on advertising – particularly on television – and Spain is now planning to treat gambling as a drug addiction and to restrict gambling ads as they do those that advertise tobacco. While Italy might, arguably, have gone too far, they are at the extreme end of a trend which does seem to be moving in the direction of greater regulation and greater restriction over how gambling firms are permitted to operate, particularly with regard to advertising. If I was currently operating in the Italian market, I’d be anticipating further moves from the government in the year ahead. They’re certainly showing no signs of softening.