Overview of the Italian Gambling Industry
Gambling has existed in Italy since the days of the Roman Empire. Italy is considered one of Europe’s more liberal countries, so it is only natural that gambling remains legal, although lawmakers have not always been lenient on the topic.
The Agenzia delle Dogane e dei Monopoli (ADM) is the state authority that regulates all forms of gambling in the country. Industry prospects began improving in 2006, when new legislation allowed a range of sports betting services to be offered online and in retail locations. The 2007 Finance Act followed, further regulating online gambling and opening the door to poker tournaments.
A real turning point came in 2009 with the Abruzzo Decree, which permitted fixed-odds games of chance along with additional online poker tournaments and ring games. Now, there are over 200 gambling sites available to Italian players, 150 of which are online casinos. In 2019, lawmakers introduced a total advertising ban across all sectors.
Until recently, there were four land-based casinos in Italy. In 2018, Casinò di Campione went bankrupt and officially closed its doors in early 2019. The remaining three venues continue to struggle with the challenging economic climate of the last few years.
From 2017 through 2019, the annual amount wagered, excluding online gambling, averaged roughly €74.76bn. During the same period, gamblers won about €57.27bn per year.
Online gambling generates less revenue because smaller amounts are staked at web-based casinos in Italy. Over the same period, the average annual amount wagered was €31.62bn, while gamblers won about €29.97bn per year. Average Gross Gaming Revenue stood at approximately €1.657bn per year, with 2019 proving more profitable at €1.8bn.
During these years, Italy collected an average of €10.7bn per year in tax revenue from gambling-related activities. The figure peaked in 2019 at €11.4bn.
Online Market Segmentation by Game Type
Public Opinion of Gambling in ItalyItaly’s Largest Gambling Operators by Market Share
Italian online gambling revenue rose by about 25% year on year to €537m in the second quarter of 2020. This pushed the Italian iGaming market past €1bn in the first half of the year, despite the challenging conditions faced by every gambling sector.
Online Casino Market
Online Sports Betting MarketItaly’s Market Sees Increase in Online Gambling in 2020
The Italian iGaming market has proven resilient despite the hard times brought on by COVID-19. Live sporting events, one of the main contributors to the industry, have been absent because of the virus.
At the beginning of March 2020, all sports championships were canceled and sports betting shops were closed. Naturally, the GGR from sports betting declined drastically. This sector generated around 71 million euros in 2020, whereas in 2019 the GGR exceeded 106 million euros.
In contrast, the online gambling market flourished. The following month, online poker tournaments generated more than double the previous year’s GGR of €7.2mn, increasing to over €16mn. In March 2019, online casinos generated revenues of €72.6mn, while this year they produced a GGR of over €92mn.
Further increases were noted in the following months, as online casino games contributed €70mn in May 2019, while in May 2020 they brought in about €105.5mn in GGR. Casino and slot revenue showed a 45.8% year-over-year increase in April, and on a month-to-month basis there was a 4.5% rise.
Poker tournament revenue has shown the most dramatic increase. With a 135% rise in May, the sector brought in over 20 million euros in GGR compared with €16.1mn the previous month. Poker cash games have also seen a rise in revenue, amounting to over 11 million euros as opposed to 9.9 million euros the month before.
Although sports betting has dropped dramatically, it is not completely absent. In April 2020, revenue totaled €20.9mn, less than half that of the previous month, which had already experienced a drastic fall in February.
The Future in Italy’s Gambling Market
The gambling market in Italy, as in other countries, took quite a hit in 2020, with the sports sector being the biggest victim in the industry. To fund the recovery of sports in the country, the Italian government has introduced a 0.5% tax on operators’ turnover from sports betting, covering both online and retail wagers.
Italy’s Ministry of Finance aims to generate €40mn by the end of 2020 and €90mn by the end of 2021. These amounts are expected to be raised through the tax, which must be paid on a quarterly basis until December 2021. The funds are intended to distribute money to address urgent issues in the country’s health care system, provide support for employers, help the economy recover from the pandemic, and assist sports activities nationwide.
Italian land-based and online sports betting operators see the new tax as an even harsher blow after the already tough period they have endured, not to mention the advertising ban introduced in 2020. Some consider the tax inappropriate and unsustainable due to the already-sinking revenues coming in. Moreno Marasco, president of LOGiCO, points out that a 1% turnover tax is equivalent to a 20% gross gaming revenue tax. Adding that to the existing 24% GGR tax effectively doubles the taxes paid by the gambling industry.