Italy to Become First European Country to Ban Gaming Advertising

On July 2, Italy’s Council of Ministers, the principal executive organ of the government, approved a ban on gambling advertising and sponsorship in the country starting January 1, 2019. The move is part of a wider goal of Deputy Prime Minister Luigi Di Maio (photo) to reduce the level of problem gambling in Italy, which over the past ten years has increased fourfold.

“I think this is an industry that has become a bit too big, at the expense of people’s health and dignity: we are going to cut it down in size,” stated Di Maio at a news conference.

Dignity Decree

The piece of legislation called the ‘Dignity Decree’ places a blanket ban on the advertising of all gambling products and services across the full range of media outlets, including TV, radio, and the Internet, in addition to at sporting, cultural, and entertainment events. The ban, however, will not be applied to the state-run national lottery or its products.

Extension for Existing Contractors

Gambling operators and their sports partners will be dealt a heavy blow by the new decree, including the country’s football clubs which rely heavily on sponsorship from gambling firms for their funding. Nevertheless, those operators with existing advertising contracts in place will be allowed an additional extension in order to make the transition that “will last at most until June 30, 2019.”

Gambling firms and their sports partners had originally argued for all existing contracts to be honored in full for their stipulated durations, but Francesco Silvestri, VP of the Five Star Movement party, rejected the suggestion, pointing out that some contracts had another nine years to run.

Lucrative Gambling Industry

In 2016, Italy’s gambling industry contributed more than €10 billion in taxes, including €250 million derived from online gambling. The sports betting market, however, has been a major force driving the market, which together with casino games accounts for more than two-thirds of the industry’s total revenues.

Advertising spending by regulated operators subsequently reached €45.9 million during the first nine months of 2017. Including football sponsorship, however, that amount would have shot up to a massive €200 million as 11 of the 20 teams in Italy’s Serie A are sponsored by gambling firms.

Heavy Lobbying To Come

The next 60 days is expected to see heavy lobbying from sports leagues looking to avoid the financially crippling hit to their funding. According to their estimates, the advertising ban will deprive the government of hundreds of millions of euros in lost taxes over the next three years, whilst hitting the country’s soccer industry as a whole. As a Serie A League statement subsequently reads:

“(Preventing betting firms from) investing in promotion in our country could lead to competitive disadvantages for the Italian clubs, with advertising budgets destined for our teams going abroad instead.”

Last year, Italy failed to qualify for the 2018 FIFA World Cup for the first time since 1958. It looks like supporters of the country’s national team may soon have more unpleasant surprises in store, too, with Deborah Bergamini, Deputy of the opposition Forza Italia party, stating that the only result of the ban “will be to humiliate Italian football fans, whose teams will have less money at their disposal.”

No Positive Effect Expected

Meanwhile, Niklas Lindahl, the LeoVegas Italy managing director, recently wrote an open letter to Di Maio explaining that advertising was one of the main advantages benefiting licensed operators over their unregulated counterparts. By banning all gambling advertising, he argued, punters would once again turn towards black market websites, a claim vehemently dismissed by the Deputy Prime Minister.

Lending its voice to the debate, LOGiCO, the Italian trade body representing the online gambling industry’s primary stakeholders, expressed its general sense of disbelief, saying that it was “perplexed” by the new law. As a translation of a statement it posted on its website explains:

“LOGiCO does not believe that this ban can produce positive effects in terms of player protection or reduce, and certainly not eliminate, the risks deriving from an uncontrolled practice of the game itself.”