€ 500 million of additional gaming taxes, an approval procedure for CTDs and a new license application process for lotto games have been approved in Italy as part of the budget law.

The Italian Parliament has just approved considerable changes in the gaming sector that impact on videolotteries and AWPs, CTDs and lotto games.

€ 500 million contribution for gaming VLT and AWP licensees

The Parliament removed the tax increase on VLTs/AWPs initially envisaged, but required that concessionaires pay an additional aggregate annual contribution of € 500 million.  Such amount will be divided among concessionaires on the basis of their number of AWP and VLTs that will be equally treated for the purposes of the calculation.

According to the law its purpose is to recalculate the consideration of the “operators of the networks involved in the collection of games on behalf of the State“.  The agreements with such entities shall be renegotiated by the concessionaires in order to reallocate the the amount collected from machines net of the gaming taxes and of the additional contribution with the concessionaires’ right to retain the amount due to them pending the execution of the new agreements.

It is still unclear who will bear such cost i.e. either concessionaires or gaming hall managers or other entities involved in the offering of the games.  However, it is quite likely that concessionaires and other entities that might be affected by such contribution will bring a claim against such law whose coming into force might be delayed or cancelled.

Authorization process for CTDs

CTDs are Internet cafes located in Italy and operated as betting shops through the connection with a foreign licensed online gaming operator.  The CTDs are a peculiarity of Italy and in my gaming predictions for 2015 I had mentioned that the regime applicable to them might change in the next future.

The budget law now prescribes, among others, that CTDs can

  1. submit an undertaking to the gambling regulator, AAMS, by the end of January to “cure” their tax exposure (i.e. they currently don’t pay Italian gaming taxes) and connect to the servers of the regulator in the offering of games, also paying € 10K to be deducted from future tax payments;
  2. execute with the gambling regulator by the end of February the operational rules that will be similar to those applicable to licensed entities; and
  3. pay by the 30th of June and November 2015 the taxes for the previous years reduced by one third without interests and penalties.

If the conditions above are met, they will be authorised to offer their games up to 2016 when they will be able to apply for an Italian gaming license.

It is still unclear whether the CTDs will accept such process or decide to continue their battle against the Italian licensing regime.  However, the same budget law considerably increases the sanctions for the CTDs that do not join the procedure.  And therefore it will be up to them to decide whether they want to face such risk.

Award of Lotto license

The budget law prescribes for the launch of a new procedure for the award of a Lotto license whose initial price will be of € 700 million.  This is still one of the most profitable games in Italy and it will be interesting to see which operators will be willing to participate to the procedure.