Italy introduces tax hike in 2019 for gambling

The Italian government has begun 2019 by hitting gambling operators hard. To coincide with their blanket ban on gambling advertising, they have also introduced a series of tax hikes aimed at the industry.

An Italian flag on top of the pole

The Italian government has introduced a tax hike aimed at the gambling industry © Pexels.

Beginning 1 January 2019, online gambling licences are subjected to 25% of the gross gaming revenue in regards to online casino and bingo games, this pertains to an increase of 5% of the previous tax. The fixed-odds betting tax has also increased by 2% to 24% of the revenue.

It’s not just the online industry that has been targeted, retail betting operators also face a 2% hike on their annual revenue, bringing their tax level to 20%. The Italian government predicts this will create €30 million in additional revenue for the country’s budget.

This has been met with fierce criticism from those working in the Italian gambling industry, with many leading figures decrying the government’s actions. These tax increases are likely to impact operator’s profits, and even the supplier Playtech has predicted it could lose up to €25 million, showing how widespread this will affect the industry. This will then likely affect payouts local gamblers receive.

In a press release published on the Agimeg’s website, Moreno Marasco, the president of Italian gaming operator Logico said:

We realise that the Government – pressured by the EU – needs to make money, but we can only express our utmost concern about the proposed amendment that raises the rates on gambling games. Moreno Marasco, President of Logico

Concern the illegal sector will flourish

One of the major concerns that Marasco raised was that these proposals will only serve to drive local gamblers to seek for better value at international operators that don’t operate legally within the government’s framework. This will then result in a loss of revenue for the Italian government. Exactly the opposite of what they expect to happen, he claims.

Italy’s coalition government has chosen the gambling industry to help alleviate its gaping hole in the budget. Yet, this is seen as a short-term solution by many in the industry, and the lack of foresight has been criticised heavily. The EU had rejected the original draft of the budget that had aimed to reduce the Gross Domestic Product (GDP) by 2.4%, this new budget with the additional taxes, brought this to 2.04% and has been approved. The budget was then approved by the Italian parliament, setting in stone the new rises.

It remains to be seen if the rises do have the desired effect, what is certain is that Italy’s government are not making it easy for gambling operators in the country.

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