Italy Rings in 2019 with Higher Gambling Taxes

Italy is ringing in the new year with fireworks, higher gambling taxes, and a fresh new blanket ban on gambling advertising

Italy is set to impose higher gambling taxes next year as part of the country’s newly passed budget, news emerged over the weekend. The new tax rates are taking effect tomorrow, January 1, or the same day that will see the implementation of a highly criticized blanket ban on gambling ads.

Following a deal with the European Commission, Italy’s populist government passed the country’s budget at the eleventh hour this past Saturday. Brussels had previously rejected the original draft of the budget that aimed to cut the country’s deficit to 2.4% of GDP, but approved a re-drafted piece that set a 2.04% target.

The budget overcame one final hurdle this weekend when it swept through the Parliament, comfortably winning a vote of confidence in the Chamber of Deputies.

Among other things, the new budget will impose higher taxes on gambling companies licensed to operate in the country. Starting tomorrow, online casino operators will be taxed at 25% on gross gambling revenue, up from 20%. Italian lawmakers believe the move will generate an additional of €50 million for the nation’s coffers.

Online sports betting operations will pay a 24% tax on revenue, up from the current rate of 22%. Retail betting operators will be taxed at 20%. They currently contribute 18% of their revenue. The increase in betting tax rates is expected to create additional revenue of €30 million a year.

Utmost Concern

Italy’s gambling sector has expressed the “utmost concern” about the impact of the new tax rates, arguing that those will only give a competitive advantage to unlicensed casino and betting operators.

In an interview with local news outlet Agimeg, Moreno Marasco, President of Logico, the trade body representing Italy-licensed online gambling companies, said earlier this month that the country’s regulated sector was particularly vulnerable, as it could easily be overshadowed by black market operations that did not shy away from circumventing rules and prohibitions.

According to Mr. Marasco, the new, higher, tax rates will not bring additional revenue, despite the government’s projections. In fact, Italy could even lose part of its guaranteed tax revenue as the tax hike would affect the ability of licensed operators to capture customers by providing them with more attractive offers.

As mentioned earlier, a ban on all forms of gambling advertising will, too, take effect tomorrow. The ban was spearheaded by Deputy Premier Luigi Di Maio, who has established himself as one of the real powers behind Italy’s populist government, and swiftly passed through all legislative hurdles this past summer, despite heavy criticism from operators and other stakeholders.

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