The European Commission (EC) has extended the standstill period on Italy’s anticipated new licensing framework for online gambling, following objections from Malta. The EC’s decision, which delays Italy’s tender for online gambling concessions until 18 November, comes after Malta raised significant concerns about the technical and compliance requirements imposed on B2B businesses under Italy’s proposed regulations.
Malta’s Objections to Italian Compliance Requirements
The Maltese government, through its Gaming Authority (MGA), submitted a formal ‘detailed opinion’ to the EC, warning that Italy’s framework could create “unnecessary barriers” for B2B businesses, such as gaming platforms and system suppliers. The MGA argued that Italy’s new requirements duplicate existing licensing standards, which could pose additional compliance costs and operational challenges for B2B companies already licensed in other EU states.
In response, the MGA called on Italy to recognize existing licenses and compliance checks that B2B operators have undergone in other EU jurisdictions. “Member States should recognise that B2B operators may already hold licences in other Member States and may be subject to myriad requirements and checks, which could easily be mutually recognised if a cooperation framework is set up for this purpose,” the MGA advised.
The EC’s extension requires Italian authorities to provide “sufficient justification” for the additional requirements, aiming to prevent the new framework from becoming “an obstacle to both the freedom of establishment and the freedom of the provision of services within the internal market.”
Italy’s Licensing Structure and Financial Expectations
Italy’s new online gaming licenses are designed to last nine years, priced at €7 million each. Additionally, licensees will incur an annual fee of 3% of their gross gaming revenue (GGR), net of gambling taxes and player winnings. As part of Budget 2024, Italy is offering current license holders the option to extend their licenses for an additional year, allowing them to continue operating through 31 December while the new system takes effect.
To limit market saturation, the Italian framework introduces stringent rules for B2C operators, restricting license holders to “one app per gambling product type and one website.” The Agency of Customs and Monopolies (ADM) will enforce these regulations, penalizing operators using additional skin sites or branding techniques. ADM anticipates that 50 operators will apply for new licenses, generating €350 million in one-time concession fees and €100 million annually through fixed fees.
Connection to Broader Italian Gambling Trends
This delay and the MGA’s involvement reflect growing concerns over Italy’s evolving gambling landscape. Italy’s new framework is part of a broader regulatory overhaul detailed in the Gambling Reorganisation Decree, which marks the country’s first major regulatory update since legalizing online gambling in 2011. The decree’s phased approach will start with online gambling and then move to adjust land-based gambling regulations, providing a comprehensive review across Italy’s regions and municipalities.
One small Italian municipality, Calliano, has recently attracted attention due to its exceptionally high average per-resident gambling spend of €12,749 in 2023, totaling over €19 million for the community. This pattern, part of a study on gambling trends in small towns, points to underlying regulatory challenges and the potential for regional impact. The Customs and Monopolies Agency’s investigation highlights the need for local regulation to address gambling’s effects on smaller communities.
The Reorganisation Decree’s next phase will tackle land-based gambling to address these regional variances, underscoring the need for responsible gambling measures that account for community health and well-being across Italy’s diverse locales.
Next Steps for Italy’s Online Gambling Licensing
With the extended standstill period, Italy’s Treasury is preparing a formal response to Malta’s objections. Once the standstill period concludes, Italy’s ADM will implement the new licensing regime, pending any further adjustments. Under the Ministry of Economy and Finance’s (MEF) guidance, new responsible gambling measures will also be incorporated, requiring operators to provide users with spending and time limits, as well as notifications to alert players when these limits are reached.
The new licensing system, if implemented as proposed, is expected to reshape Italy’s gambling industry by introducing more restrictive measures and significantly higher licensing costs. Industry analysts anticipate that these changes will deter smaller operators from entering the market, concentrating competition among larger companies capable of meeting the increased compliance and financial obligations.
As Italy moves forward with this new licensing regime, Malta’s influence highlights the importance of harmonizing EU-wide gambling regulations. The EC’s response to Malta’s concerns could set a precedent, emphasizing the need for streamlined regulations that recognize existing licenses across EU Member States, ultimately supporting a more integrated and competitive European gambling market.
Source:
Malta opinion sees Italy delay yet guarantee regime change for online gambling, sbcnews.co.uk, October 2, 2024.
