VLTs in Italy

A recent report from Eurispes (an Italian research insitute) on the Italian gaming market L’Italia in Gioco, has indicated in about 90.000 the Video Lottery Terminals at present active in the world. (4% of the whole world gaming machines). VLT’s are mainly located in North America, (22.200 in Montana, 21.200 in West Virginia, 14.000 in Louisiana, 13.000 in New York State), Canada, and marginally in Europe, (10.000 terminals, most of which in Sweden and Czech Republic).

If these numbers are reliable, the launch of the VLT network in Italy, with its over 40.000 machines will have to be considered almost a revolution, the second performed by this country after the creation of an on-line gaming market through licencing. The birth certificate of this operation is Decree n. 39/2009, named “Abruzzo”, now Law n. 77/2009, (“urgent provisions in favour of people hit by April 2009 earthquake in the Abruzzi region, and other urgent Civil Protections interventions “), where art. 12, comma 1, point l) establishes the experimental start of a remote controlled gaming system, made of VLT located in dedicated sites.
Operators – ten at today – that are already holding licences to run Amusement With Prize gaming machines (AWPs, but Newslots in AAMS definition) disciplined by art. 110 comma 6 a), TULPS (the Police Act), have been authorised by State Monopoly (AAMS) Decree of the 6th of August 2009, to live test the new VLT machines. Each of the ten operators had to indicate the number of VLT’s he wanted to install, but within the limit of 14% of the existing AWP’s he is actually running.. The operators had to pay 15.000 Euro per machine, or better per “right of exercise” of each VLT requested (art. 12, comma 1, point l), number 4), Law Decree 28th of April 2009, n. 39). AAMS, on the basis of the operators requests and having verified the payments of the first instalment of the 15.000,00 Euro, authorises the setup of the VLTs, in compliance with the New Gaming System determined by art. 110, comma 6, point b) T. U.L. P.S.. On the 15 of September 2009, AAMS officially communicated that testing of the New Gaming Systems shall end by the 30th of March 2010, and therefore by that date operators have to confirm the number of VLT’s they have requested and obtained, and the payment of the second instalment to be executed by the 30th of June 2010 ( AAMS Decree dated 17/3/10). Just few days ago the March deadline has been postponed to the 30th of April 2010. In the mean time preparations are ongoing feverishly: dealings between operators, landlords, parlors, shops, stores, wharehouses, existing gaming halls and so on, discussions of cross interests – altough speaking different languages – betweeen primary State licencees and experienced traditional slot machines operators.

Probably not everyone will find his satisfaction, even if we hope so for all of them. Investments to take part in the “Operazione VLT” at any level are substantial, and even obtaining credit (or getting bounden), is not so easy any more. Also the Ten Newslot Licencees had to apply for bank and/or market credit, and the weaker of them will be obliged to find agreements with the stronger. As far as foreign players are concerned, apart from one or two giants of this sector, nobody seems to dare the adventure as a protagonist, but better trying selling machines here and there. In the mean time AAMS is preparing the launch of the tender that will assign the licences to those who intend to enter the gaming machines market as “network operators”: of course a relevant part of the tender participants business plans will have to be assessed on VLT’s, notwithstanding the fact that VLT’s market is still to come.
Talking about the tender, granted by law the renewal of the licences to the existing Ten, the only ones that seems willing a licence are groups of traditional machines operators, adopting the cooperative model, such as B-Plus (formerly Atlantis) and Gamenet-Criga have done in the recent past. Rumors of interest by few VLT manufacturers have not been confirmed yet: nothing substantial on the horizon. Getting into technical details, AAMS Decree dated 22nd of January 2010 (Official Gazzette n. 32, 9/2/2010) specifies that VLT’s shall have a minimum bet of 50c with a limit of 10 Euro per game. The maximum win per game – jackpot excluded – is 5.000,00 Euro, but total payout cannot be less than 85%. The Jackpot is tuned on each Gaming System, with a maximum of 500.000,00 Euro, but limited to 100.000,00 Euro per single gaming hall. Also the sites where VLT’s can be located are defined by Law: bingo halls, betting shops, dedicated gaming halls (6 different categories are described at art. 8 of the Decree). It is compulsory though for VLT to be located in premises where the owner has obtained a licence under art 88 TULPS. A condition that has fevered the market: in fact the text of article 88 says that the licence is related to betting, and granted to licenced (by the competent Ministry) betting operators.

If the provision is strictly interpreted, only three of the 6 categories of premises indicated by the VLT decree could match this condition (bingo halls, betting shops): but this is not the intention of the Authority. The two Ministers in fact are already working on coordination. Let’s see the final outcome. Not so far ago (it was the year 2000) we have assisted in Italy to a (frustrating) gold-rush toward gaming halls and premises that could match the requirements of the upcoming bingo halls. On the basis of that experience caution is a must. But today’s market and legal contest are highly different, possibly mature for absorbing in the territory with a decent success the new VLT oriented gaming halls. The VLT era is a new challenge for the Italian market, an opportunity for the Regulator to restyle the map of distribution and access to gaming in the territory, and a chance for a starring role to new operators.