Italy ‘s first move towards the regulation of remote gambling B2B operators

The Italian Government has just issued the Fiscal Law Decree, which is intended to introduce new fiscal measures jointly with the Budget bill for 2020.

Not surprisingly, fiscal measures on gambling have also been introduced. One of these has, however, attracted greater attention since it introduces compulsory registration into an official unique Register for all gambling operators active in Italy. This registration is compulsory not only for all gambling licensees but also for any other related operators active in the offline and online gambling offer, including the holders of remote gambling accounts toping-up points of sales and the producers of remote gambling platforms.

Interestingly, the Fiscal Law Decree also refers, generically, to any other person who carries out any functional activity related to gambling collection. The aim of this compulsory listing into an official Register – until now limited to the gaming machines licensees and resellers – is to combat the infiltration of organized crime in the gambling sector and the spread of illegal gambling, as well as to pursue a rational arrangement of gambling in Italy.

In order to get registered, the Italian Gambling Authority (ADM) will verify for each applicant the holding of national Public security licenses, authorizations, and licenses, as well as the relevant anti-mafia certifications set forth by current legislation. The registration will also be subject to the payment of an annual amount specified for each different category.

The exercise of any such gambling activity, in the absence of being listed on the Register, is subject to punishment of a pecuniary fine and a ban from being registered for the next 5 years. Also, the same pecuniary sanction is applied to the licensee which has contractual relations related to its gambling activities with the party that isn’t listed in the Register. In the event such behaviour is repeated three times, the gambling license is forfeited.

Clearly, the implementing details and exactly who is subjects to this new registration requirement will have to be determined by ADM. However, the scene seems to be set, because remote gambling B2B operators are clearly targeted, among others, with authorisation and payments requirements. That makes this Fiscal Law Decree the first move towards specific regulations for remote B2B gambling providers.

To date, within the Italian remote gambling regulation, only B2C licensee’s role, activities, and liabilities are regulated. There is a lack of regulation for hosting providers who manage licensees’ platforms, as well as for software providers, who are not regulated at all. A providers’ actions relating to gambling operation and offerings in Italy is currently affected only indirectly, by regulations on the remote gambling licensee. There is no relationship between the B2B operator and the ADM; ADM can only interact with the remote gambling licensee.

There are many advantages deriving from a regulated model for the remote gambling B2B operators. One of these, certainly, is to limit listings in the Register to only highly qualified B2B operators. Such regulation would keep out of the Italian gambling system B2B competitors that do not hold proper qualifications or do not seem to have good security and integrity standards.

Because of the provisions of the Fiscal Law Decree, any game or platform authorisation will depend on the licensee’s contractual relationships with providers who are duly listed in the Register. This is a relatively simple, efficient way to identify the technological activities related to the B2C platforms and games authorisation processes, ensuring full transparency within the remote gambling network by identifying each subject’s role and liabilities.

This first move has been long- awaited and is therefore welcomed.