Italy’s Custom and Monopolies Agency (ADM) has announced that starting June 1, 2024, new regulations will be enforced regarding bookmakers’ bonus management and the handling of palpable errors. This move addresses two significant areas of contention that have persisted since the regulated market’s launch in 2006.

New Regulations on Bonus Management

The ADM has established definitive rules through a specific decree on Bonus Management, detailing legislative criteria for the practical use of bonuses. These guidelines cover terms and conditions, payment methods, and the application of bonuses for ‘one-off’ tax purposes.

Under the current rules, Italian bookmakers face a ‘bonus limitation,’ restricting them from awarding more than a €100 bonus per customer on a fixed-odds wager. However, operators have expressed the need for a clear methodology to calculate the cost of these bonus rewards for tax and auditing purposes.

To address this, the ADM has clarified that “both the bonus used and any stake placed by the player will be included in the calculation of the amounts wagered and winnings paid.” This settlement aims to provide transparency and consistency in how bonuses are taxed.

Handling Palpable Errors

The ADM’s upcoming decree also introduces a regulated process for addressing palpable errors. These errors have historically led to numerous customer disputes, often requiring resolution through the legal system. The new rules aim to end such litigation by providing a systematic correction process.

Bookmakers are now required to submit a correction request through an application system, detailing the operator and the challenged odds. Upon approval, the odds will be recalculated based on the “market average, as determined through the national tote.” This new process is expected to streamline error corrections and reduce legal conflicts.

Ongoing Reorganisation of Italian Gambling

These new regulations operate independently of the broader ‘reorganisation of Italian Gambling’ currently undertaken by the Italian government. Recent developments in this reorganisation include the introduction of €7 million licenses for a nine-year term for online concessions, a significant increase from the previous €200,000 fee. This change is intended to reflect market dynamics dominated by major operators such as SNAI, Lottomatica, and Flutter Entertainment.

The Ministry of Finance (MEF) has endorsed the new fee structure to resolve long-standing legal disputes over licensing and to reduce the number of operators in the market. Additionally, the MEF is negotiating with Italy’s 20 regional governments and 100 municipalities to implement federal reforms related to land-based gambling venues.

These comprehensive reforms signify Italy’s commitment to refining its gambling regulations, ensuring a more transparent and consistent environment for both operators and players.

Source: “ADM settles Italy’s betting rules on bonus management & palpable errors”. SBC News. May 30, 2024.

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Representatives from leading trade associations in Italy’s gambling industry united in a resounding voice at the “Game: One Market, One Reorganization” conference by the Milton Friedman Institute. The participants highlighted concerns over the government’s proposed exorbitant increase in license fees, urging for correct and uniform regulatory and economic policies.

Attendants Highlighted Worrying Industry Trends

The event drew united representatives from leading associations, with Alessandro Bertoldi, Executive Director of the Milton Friedman Institute, presiding over the conference. Bertoldi emphasized the unjustified drastic spike to €7 million ($7.66 million) from 2018’s €200,000 ($392,000) could have a lopsided impact on market dynamics, legality, and consumer protection.

The regulatory interventions that the Government is preparing will once again create disparities by favoring the illegal market and heavily conditioning the free market.

Alessandro Bertoldi, Milton Friedman Institute Executive Director

Emmanuele Cangianelli, President of the Italian Association of Public Games Operators, advocated for an integrated overhaul of gaming distribution channels and products. He urged clear regulations on payment services to bolster online gaming, emphasizing the importance of preserving the uniqueness of concession titles while offering multi-channel consumer choices in legal gaming.

Geronimo Cardia, President of ACADI, Italy’s Association for Slot Machine Vendors, lamented the sector’s decade-long struggle due to fragmented and partial interventions, emphasizing the negative impacts on public interests, legal compliance, and employment levels. He stressed the detrimental effects of prioritizing remote gaming reorganization over retail, reducing revenues, compromising player protections, and stifling SMEs.

Smaller Businesses Will Suffer the Most

These were far from the only concerns, as other representatives underscored the significance of recognizing small and medium-sized gaming enterprises, highlighting the sector’s economic contribution and employment opportunities. They urged inclusive policies benefiting diverse operators, noting that the drastic fee increase would reduce active operators to 20, down from the present 91.

Stakeholders also used this opportunity to reiterate their opinions on Italy’s blanket ban on gambling advertising, arguing that it hurt the competitiveness of licensed operators and was partly responsible for the proliferation of black market players. The industry united in support of small and medium-sized businesses, most susceptible to regulatory uncertainties.

The legal gaming sector expresses its disappointment at the missed opportunity for an organic overall and coordinated reorganization.

Moreno Marasco, Logico President

The united front of industry representatives conveyed a clear message urging the government to adopt comprehensive, fair, and cohesive policies that uphold legality, support diverse operators, and prioritize consumer welfare in its approach to the sector’s reorganization. However, the Italian government has not proven receptive to industry input and may push on with its reforms regardless of stakeholder warnings.

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Black markets are very active in the online gambling scene. Several operators work without a license, which causes major problems for authorities.

Significant research has been done, and the final report published by the Italian press La Gazzetta dello Sport has sent shockwaves throughout the Italian gambling industry. The report says that a staggering €18.50 billion is wagered on unapproved gambling websites annually in Italy. This eye-opening revelation illustrates approximately 75% of all unlawful bets placed within the country.

An Astonishing Revenue Loss

The implications of this unlicensed gambling activity are not limited to illegal bets alone. According to the European Gaming and Betting Association (EGBA), Italy’s black market outcomes in a colossal failure of nearly €1.00 billion in gross gaming income every year.

This astounding figure is equivalent to the blended regulated online gambling earnings of eight other European Union countries, including Croatia, Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia.

While the Italian Customs and Monopolies Agency (ADM) has taken some actions to handle this issue, it is evident that the problem persists. In the current year alone, ADM has blocked over 9,800 unapproved sites, surpassing the total of 9,400 blocked in the entire year of 2022.

Rising Concerns and Calls for Action

Concerns of both citizens and authorities appeared very quickly.

EGBA is deeply worried about the enormous number of Italian players who opt for unlicensed gambling platforms, notably those located outside of the European Union.

If you’re wondering why this is such a big problem, it’s because these sites lack the client safety measures implemented by regulated operators and pose a more increased risk to the well-being of players. To mitigate the blossoming of the black market, EGBA is advocating for expanded awareness among clients about the risks associated with unlicensed gambling.

One of the suggested strategies is the revision of Italy’s blanket ban on gambling promotion. At the moment, Italy prohibits all forms of gambling marketing. On the other hand, EGBA thinks that the absence of understanding regarding permitted casinos may be the cause for the high majority of unregulated gambling in the country.

The EGBA’s secretary-general, Maarten Haijer, expressed his concerns about Italy’s black market and called for action saying: ”The significant size of Italy’s online black market is concerning, yet it is not surprising given that Italy has one of Europe’s strictest advertising regimes for its licensed gambling companies. The country’s ban on advertising for licensed gambling operators is clearly favoring the black market. Without a sufficient level of advertising, there is no real way for Italians to tell the difference between a gambling website which is licensed in Italy – and applies the country’s consumer protection rules – and one that is not. It is evident that enforcement action against black market operators is not sufficient. The government needs to revise its advertising rules for gambling to ensure Italian citizens can be well-informed about the licensed websites in the country.”

The report’s publication overlaps with a demanding period for Italy’s federal football team, as several players face investigations and penalties related to breaches of betting rules.

”This week, the Italian Federal Prosecutor’s Office handed Juventus footballer Nicolò Fagioli a seven-month suspension for betting on football.”

We hope that Italy will find a way to suppress illegal gambling so that players can play safely and securely!

Source: ”EGBA: revise Italy advertising ban to combat black market gambling”. iGaming Business. October 19, 2023.

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