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Gambling Law Across the EU – Italy

Taking a further look into the issues affecting gambling law across the EU, Lawyer Monthly turns its sights on Italy and speaks to Stefano Sbordoni from Studio Legale Sbordoni in Rome.

1) Can you give me an overview of the legalities of the gambling industry in your country at the moment?

On November 2012 it has been published Decree Law n.158/12 “Urgent measures to promote the country’s development through a higher level of health protection” so called Balduzzi Decree. The title of that decree seemed to herald the publication of rules that were supposed to promote economic development, emphasizing however important and sensitive aspects of health and more. Although the principles set forth in the provisions are valid, according to many the expectations have partly been disregarded. Criticism is that the rules do not identify new measures to promote economic development, while the feeling of the operators is that the gaming industry risks to get out even more illegitimate.

Operators are therefore legitimate to ask what will be the future of their advertising campaigns. Of course this is a critcal phase for the Italian market, very much due to thre crisis and the upcoming political elections. We strongly believe though that there are all the elements for a rapid recovery.

2) The EU Court recently judged that OPAP’s gambling monopoly in Greece  is illegal and that authorities should reform the sector to protect consumer or open it up to competion. What are you opinions on this?

The Greek Ministry of Finance presented a bill aimed at maintaining the monopoly by OPAP on online gambling until 2020, in breach with the law that would give rise to a system based on licenses. In August, foreign operators were asked to choose between buying a license or a temporary stop of activities. The RGA (Remote Gambling Association) has defined the steps taken by the greek regulator  as “unfair” and “impossible to put into practice”, announcing legal action, Not enough then, even if the regulator is trying to stop the illegal parallel market, and to make it more palatable the government has started the process of privatization of Opap where 8 operators worldwide have submitted a bid.

Furthermore, for the European Court of Justice, the national legislation in Greece, which establishes the monopoly OPAP and prohibits foreign operators to offer gambling in the territory “involves a restriction on the freedom to provide services and on the freedom of establishment.”

3) What effect would the potential reforms have on the gambling industry?

In Italy, the traditional regulatory framework is set to change with the gradual legalization of gambling. According to the Supreme Court, the picture that emerges, is that, both at national level, as in the EU, there is no disgrace in gambling as such, but only to the extent that, escaping state control bodies, can be a serious danger due to criminal infiltration, and all the dangerous consequences associated with them. Finally, according to case law, legalized gambling is a real entrepreneurial activity, and as such to be protected at national and European level.

4) What are the key legal issues that gambling companies must consider?

The gaming industry is a complex area of ​​business and in which are interwoven interests and crossover of different needs, not all related to law enforcement and public safety.  Our legal system entrusted various administrative authorities and institutions. Just think of the protection of the players, the safety of free enterprise and competition, the protection of good health associated with “gambling addiction”.

The Autonomous Administration of State Monopolies now incorporated in the Agency of Customs and Monopolies with effect from December 1, 2012 – has been assigned important tasks of supervision and control as well as the main functions in the field of gaming and betting. These functions are substantiated, in particular, in the adoption of the rules, including technical, the award of concessions and actual release of the main certificates needed for the pursuit of such activities .

5) What are the main licensing and taxation issues within the gambling industry?

Thanks to the new regulations (Decree-Law n. 16/12, now Law no. 44/12) operators will be able to market all types of land-based game based on horse racing and sports, and this is going to be the cornerstone of the new Italian licensing system, that will characterize the market after 2016. On 30 June 2016 all the existing concessions will ( except for the so called Comunitaria, namely, those that allow online gaming). The next three years are thus the key to the survival and continuity of the concession system.

According to AAMS (Administration of State Monopolies) in 2011 gambling gross turnover was of almost EUR 80 billion. Specifically, 56.3% of total revenue from slot machines and video lottery, 12.7% from Scratch, 8, 5% from Lotto, 4.9% from sports betting, 3% from Superenalotto and the remaining Bingo and horse betting. Revenues for the State  high in absolute terms, have increased only marginally over time, being equal to over € 8.5 billion last year, with an increase of less than 3 billion between 2000 and 2011. To keep public control over this activity, average tax on gaming so far has been kept reasonable, and now fluctuates between 4 and 12%.