Gambling Industry in Crosshairs of Italian Coalition Party

Gambling Industry in Crosshairs of Italian Coalition Party

Italy’s president Sergio Mattarella has failed to give the Prime Minister-designate Giuseppe Conte his blessing to form a coalition government consisting of the Five Star Movement (M5S) and League parties. The President said that the only proposals he could not agree to was the choice of Paolo Savona as finance minister, citing his vehement opposition to the EU.

While the EU may be relieved to hear the news, the institution will still be concerned as to the direction the politicians who almost formed the next government were preparing to take the country. It would seem that the gambling market was also in their crosshairs, with the coalition government apparently preparing to inflict major damage on the Italian gambling industry.

According to the proposals in the draft document circulated recently by the new government, severe restrictions should be placed on the number of slot machines and video lottery terminals in the country, as well as strict restrictions imposed upon gambling games with repeated bets. Furthermore, “an absolute ban on gambling advertising and sponsorships” has been suggested, while the use of personal cards and spending limits has been urged to help prevent youth gambling and suspicious cash flows.

Gambling Addiction Concerns

Gambling activity in Italy is on the rise, and last year more than 17 million people engaged in at least one form of gambling, up from the 10 million people in 2014. The report produced by Italian gaming regulator AAMS stressed that while the incidence of young people gambling in Italy had almost halved over this period, in the southern part of Italy the number of young people vulnerable to gambling addiction had actually increased.

Online gambling also represents an increasing area of concern for the government, and last month a nationwide self-exclusion program was launched enabling gamblers to exclude themselves from all licensed online gambling sites via a single online form. Once completed, Italian licensed operators would then be required to block the player from accessing any of their websites, either temporarily or permanently depending upon the request.

€2.3 Trillion Debt Load

Nevertheless, Italy is currently struggling with a €2.3 trillion debt load, and desperately needs to develop and preserve various income streams. In 2017, for instance, government coffers collected €10 billion by way of taxes and licensing fees, with €6 billion of that amount coming from taxes levied on video lottery terminals (VLT), and amusement with prizes (AWP) slot machines. A further €140 million was raised via online gambling operators holding Italian licenses, all of whom stand to lose millions in revenue if the proposed advertising ban is actually implemented.

Slot Machine Clampdown

The new government has signaled its intention to address gambling addiction concerns via a series of extreme restrictions on the gambling industry. The new government’s proposal to clamp down hard on slot machines, however, comes despite the previous Italian government having already reduced the number of these machines in the country by a whopping 35%.

According to the draft document being circulated by the ‘government’, slot machines should only be limited to a small number of defined places, while the minimum distance from sensitive places such as schools and youth centers should be increased. Gambling industry experts, on the other hand, have been quick to point out that the slot machine measures proposed in the draft document have the potential to severely damage the country’s gambling industry, and drastically reduce the tax revenue generated for the government. For example, slot machines traditionally produce the lion’s share of gambling revenues in most markets, but the ‘government’ directive suggests excluding bars and various distributors from offering these products.

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