Coronavirus Impact on Italy’s Gambling Industry

Coronavirus Impact on Italy's Gambling IndustryThe coronavirus had a negative impact on numerous businesses around the world and the gaming industry in Italy is no exception. Being one of the countries that took a serious hit from the virus, Italy suffered huge losses, including in the gaming sector.

In 2019, the gambling industry enjoyed a peak in wagers, amounting to around 110 billion euros. The biggest contribution came from wagers placed on casino games and poker tournaments. The Gross Gaming Revenue (GGR) of the gambling market in Italy is estimated at 19.45 billion euros. Meanwhile, the tax revenues generated from gambling activities in the country are 11.4 billion euros.

The Gross Gaming Revenue of online gambling in Italy in 2019 reached roughly 1.8 billion euros. The biggest contribution came from bets made on online skill-based casino games and poker tournaments. This sector generated revenue of around 978 million euros. Sports betting also had a huge contribution with a revenue of 725 million euros generated in 2019.

The Italian cities with the most gambling venues in 2018 include Naples, Rome, Milan, and other popular tourist destinations. The two leaders, however, are Naples with 1,037 gambling facilities and Rome with 904 gambling venues. Naples, Rome, and Milan were also the three Italian cities to generate the highest GGR from virtual sports in 2020. These are also the top three locations in 2020 where Italian punters placed the most sports bets at betting agencies, generating the highest GGR for this sector of the gaming market.

In mid-March 2020, however, more than 11,000 gambling venues in Italy were forced to shut down due to the lockdown period in the country. Although the original plan was to shut down gambling facilities until mid-April, the constantly increasing cases of COVID-19 in the country had the venues pause their operation until the middle of June. The gaming industry slowly started resuming its activity, operating under strict regulations that ensure everyone’s safety.

Unfortunately, as the coronavirus cases in Italy started increasing yet again towards the end of 2020, gambling venues were yet again forced to close down in an attempt to decrease the spread of the virus. This may lead to a further decline in the gaming revenue for 2020. Although the overall gaming industry may be suffering great losses due to the pandemic, the online gambling sector experienced a huge peak during the lockdown period.

Pandemic Restrictions Led to a Hike in Online Gambling

Due to the lack of live sporting events during the lockdown period in Italy, sports betting experienced a drastic decrease in revenue. This led to a 10% decline in revenue in April 2020 compared to the previous month. Despite that, a total of 157 million euros in April 2020 represented flat year-over-year revenue compared to 157.86 million euros in April 2019.

Online Casinos and Poker During the Lockdown Period
The Total GGR of Online Gambling

Top Performers in the Online Casino Sector in 2020

Top Performers in the Online Casino Sector in 2020
During the pandemic, online casino operators also enjoyed a peak in revenue with more individuals choosing to spend their time at home playing various casino games online. During the months of the lockdown period, there was a huge spike in the GGR of online gambling in Italy. The revenue for online casino games in March amounted to 94 million euros, while during the same period in 2019, it was 72.6 million euros. In the next two months, online casino games revenue continued to grow, reaching 98.2 million euros in April and 105.5 million euros in May.

When compared by their market share, several online casino operators enjoyed quite the growth during the lockdown period of 2020. The online casino company with the biggest market share for April 2020 was PokerStars, having a 14.17% market share. The next big market share of 8.26% was held by Sisal, followed by 888 with a market share of 7.76%.

In March 2020, the top 3 online casino operators in Italy by market share had a different company in the third sport. While PokerStars was still the leader with a market share of 12.59% and Sisal was in second place with 8.31%, it was Lottomatica that had the third biggest market share of 7.59%. However, in the following month, 888 managed to generate higher revenue, taking the third spot in April.

Fast forward to July 2020 and PokerStars was still the leading online casino operator with the biggest market share of 12.48%. It was followed by Sisal with 8.51% and Snai with 7.81%. In July, Lottomatica had a market share of 7.03%, while Eurobet ranked fifth with a market share of 6.69%. While the rest of the online casino operators experienced ups and downs, Pokerstars managed to remain the leading online casino operator in Italy in 2020.

Italy’s Sports Betting Industry Badly Affected

Despite the increase in online casino and poker revenue, the lockdown period due to the pandemic inflicted serious damage on the sports betting industry. While the GGR of online sports betting reached 95.25 million euros in January 2020, by April, the GGR dropped to 20.9 million euros.

The lack of live sporting events during the lockdown period in Italy was the main reason for the huge decline in the sports betting sector. Even though punters were still able to place bets on some sports, this sector suffered the biggest loss in the online gambling industry in Italy.

Poker Games and Tournaments Revenue In Lockdown
Reopening After Spreading of the Virus

Italian Cities with the Highest GGR from Online Sports Betting

Italian Cities with the Highest GGR from Online Sports Betting
Despite the huge decline in sports betting in Italy during the lockdown period, as gambling venues reopened and there were live sporting events to bet on, several Italian cities contributed to the GGR of sports betting.

When we take a look at the revenue generated from bets in betting agencies between January and August 2020, we will notice that the top 5 Italian cities with the biggest contribution include Naples, Rome, Milan, Turin, and Bari. The revenue generated for this period by Naples amounted to 52.64 million euros and Rome contributed with revenue of 29.59 million euros. Milan’s revenue from sports bets in betting agencies was 20.31 million euros, Turin generated 15.91 million euros and Bari reported revenue of 14.7 million euros. As can be seen, Naples is the leading city with the biggest revenue from sports agencies betting in 2020.

The 5 Italian cities that dominated the virtual sports betting scene are almost the same as the ones mentioned above. The only difference is that the fifth position is taken by Palermo. Between January and August 2020, Naples generated the biggest GGR of 19.76 million euros from online sports betting. The cities that follow are Rome with a GGR of 8.13 million euros and Milan with a GGR of 6.95 million euros. The GGR that Turin reported during that period amounted to 6 million euros, while Palermo contributed with a GGR of 5.65 million euros. These numbers show that Naples is also the leader in Italy when it comes to online sports betting in 2020.

The sports betting operators that have been contributing the most to the GGR of the top 5 cities mentioned above include bet365, Snai, Eurobet, Sisal, Planetwin 365, Goldebet, and several other major virtual sportsbooks. In April 2020, bet365 had the biggest market share of 22.1%, contributing the most to the GGR of online sports betting in the top 5 cities in Italy for 2020. The share of Snai in April 2020 was 13.6%, while Eurobet and Sisal were standing respectively at 9.6% and 9.4%. The market shares of Planetwin365 and Goldbet for that month were respectively 8.8% and 8.2%.

Industry Response to the New Turnover Tax

Industry Response to the New Turnover Tax
In May, the Italian government decided to introduce a new turnover tax that was supposed to help the recovery of the sports sector after the lockdown period caused by the coronavirus pandemic. Thanks to the new tax on the sports betting turnover of licensed operators, the government hopes to raise about 90 million euros by the end of 2021.

Decreto Rilanco, or Decree Law no. 34, introduces several measures that the government of Italy will take to strengthen the healthcare system, support employers, and help the recovery of the economy after the pandemic. The funds generated thanks to this new tax will be distributed to the Ministry of Youth and Sports, helping professional and amateur sports throughout Italy to recover from the losses caused during the lockdown period.

The new tax of 0.5% will be imposed on sports betting wagers placed both online and at retail shops. The tax must be collected on a quarterly basis by the end of 2021. The government’s goal for the end of 2020 is to collect up to 40 million euros thanks to the new turnover tax. Meanwhile, the expectations for the next year are about another 50 million euros in tax revenue. The decree also notified that if the expected amount is collected sooner than the provided period, it can be withdrawn earlier than the end of 2021.

The new tax on sports betting turnover was criticized by the Italian operator association Lega Operatori di Gioco su canale Online (LOGiCO). It deemed the tax as unreasonable and economically unsustainable. LOGiCO stated that the new tax was not ensuring any tax equity and the biggest beneficiaries of it will most likely be offshore operators.

Moreno Marasco, president of LOGiCO, also noted that a 1% turnover tax will equal a 20% GGR tax of 20%. When this levy is combined with the already existing GGR tax of 24%, the gaming industry will have to pay almost double the amount in taxes. Marasco suggested that instead of using the turnover tax to support the sports industry, the betting sector can help sports through different sponsorships. That is, however, not possible due to the gambling ad ban that was introduced at the beginning of 2019.

The Italian retail betting authorities Acadi and Sistema Gioco also warned about the unfair turnover tax. According to them, it may lead to a tax burden exceeding 30% across all licensed betting operators in Italy. The sports betting sector suffered a huge decline in revenue during the lockdown period and the new turnover tax may further slow down its recovery after the pandemic.

Gambling Revenue and Statistics

Gaming Revenue of Gbling in 2019

Gaming Revenue of Gambling in April 2020

Top 10 Online Sports Betting Operators

Top 5 Operators for Online Poker

Top Online Casino Operators in Italy

Gross Gaming Revenue of Online Betting

Top 5 Italian Cities by GGR

Italy’s Gross Gaming Revenue of Online Gambling in 2019 (in million euros)
Online casino and poker 978.2
Sports bets 725.6
Bingo 34.8
Online bets 29.7
Lotto, 10eLotto 29.7
SuperEnalotto 18.6
Horse racing bets made in shops 13
Betting Exchange 8.9
Scratch cards 7.2
National Horse Racing 5.1
Other 2.6
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