AgiproNews Italian View – New decade brings new tax landscape

Securing approval of its first Budget Law (passed on 24 December 2019), Italy’s new coalition government anticipates collecting a further €1.1 billion in taxes paid by gambling incumbents.

A new decade begins with land-based operators adjusting to a new taxation framework, with the 5Star-DP coalition having sanctioned Italian gambling fourth set of gaming machine tax hikes in just over a year.

Budget Law figures reveal that the coalition government anticipates generating €470 million, through placing a 20% tax charge on player winnings above €200 on video lottery terminals (VLTs) wagers.

VLT players will not be the only consumers hurt by 5Star-DP new tax regime, as from March 2020 the government will sanction a further 20% charge on lottery games and scratch cards for player winnings above €500.

The coalition anticipates securing its €1 billion gambling tax target, generating a further €630 million in revenues from all-round increases in gaming machines turnover taxes, as slots duty increases to 23.85% (formerly 21.68%) combined with a rise in VLT charges to 8.5% (formerly 7.9%).

Despite the tougher tax backdrop, the Budget Law will introduce new lucrative gaming machine concessions set for a period of nine years, which the government is set to issue by the end of 2020.

The government will allow EU based operators to bid for the tender rights, allowing the winning parties to operate a total of 200,000 slot machines, 50,000 VLT and 35,000 machines operating within licensed bars and tobacco shops.

The starting price for the new machine concessions has been set at €2.5 million, with contracts commencing from 1 January 2023, a considerable mark-up on the former licences priced at €200,000, featuring a four-year operating period.

Of further note, the coalition chose not to carry a former 5Star amendment, abandoning decree enforcements on gambling venues having to be 200-to-500 metres away from ‘sensitive venues’ such as churches, schools or hospitals.

Nevertheless, Italy’s new government will require all licensed gambling businesses to sign-up to a ‘mandatory registry’ controlled by Italy’s Customs and Monopolies Agency (ADM).

Passing the Budget Law, the coalition grants the ADM new financial powers, which will allow the agency to block credit card payments and freeze business-related accounts on operators deemed to breaching Italian gambling laws.

ADM sanctioned penalties have been set at between € 300,000 to € 1.3 million per violation.