Trade association claims number of licensed operators could drop from 91 to 15 and see players flock to the black market
The European Gaming and Betting Association (EGBA) has warned that Italy’s proposal to raise the operator licence fee to €7m would have “severe consequences” and see as much as 83% of the legal market wiped out.
Italy’s Council of Ministers are currently discussing implementing a “35-fold increase” for operators, dramatically raising the price of a licence from the €200,000 fee that was introduced in 2018.
Additionally, the €7m figure would represent a significant increase on a formerly proposed licence fee hike to €2.5m, which was ultimately never implemented.
Should the new fee be introduced, it will be the highest in the European Union and the EGBA predicts that the number of licensed operators in the market would drastically reduce to between 15 and 20 from 91, or an 83% reduction in the worst-case scenario.
Combine that with the local advertising ban, the EGBA predicts that Italy’s black market will only get worse, after suggesting in October that the unregulated sector already generates €1bn in online gross gaming revenue every year.
The EGBA said: “Anticipated revenues from the proposed licenses, even in the most optimistic scenario, range between €105m to €140m for the Italian state.
“EGBA suggests that implementing the current unused tender proposal of €2.5m, without the previously suggested limiting factors of 40 licensees and an auction mechanism, could yield a similar or higher tax revenue without significantly harming market competitiveness.
“By limiting competition to only a few operators and inadvertently bolstering the size of the black market, the proposal risks undermining player protection.”
Maarten Haijer, EGBA secretary general, commented that Italy would become a “closed shop” to operators looking to enter the market.
Haijer explained: “The proposed increase in licensing fees is unparalleled and unheard of, it would make Italy the most expensive country in Europe to obtain an online gambling licence.
“Together with the other restrictions in its gambling market, such as the local advertising ban, this proposed fee hike will make Italy a closed shop for new market entrants and lead to an exodus of existing licensees.
“This also raises concerns on compliance with EU law. We urge the Council of Ministers to reconsider the proposal, as it will make the country’s online gambling black-market problem even worse, not better,” he added.