Marcello Minenna, the new Director-General of Italy’s ADM customs and monopolies agency, has been urged to exclude horseracing and licensed betting exchanges from Italy’s new blanket 0.5% turnover tax increase which will be enforced across all wagering verticals – retail, digital and virtual sports.
Italian betting’s latest tax increase was authorised this summer after the Parliament approved a set of fiscal measures adopting the ‘Revival Decree’, a federal mandate aimed at supporting the recovery of Italian business and social services post COVID-19.
Enforced as a temporary measure, the ADM increased betting turnover duties by 0.5% seeking to raise €90 million to ‘fund the revitalisation of sports’ – a figure that was immediately contested by bookmakers and operators returning to business from lockdown.
Representing Italy’s embattled Ippica (horse racing sector), Agricultural Undersecretary Giuseppe L’Abbate warned Minenna and the ADM that an underfunded racing sector could not accept the ‘new normal’.
“The Decree is clearly addressed to the sport sector, not to horse racing,” L’Abbate detailed in a written statement to the ADM. “A new tax will affect our attempts to support the Ippica.”
Having held face-to-face discussions with L’Abbate, Minenna assured Italian racing that Sports Minister Vicenzo Spadafora will shortly clarify whether racing concessions must be included in the duty or not.
Meanwhile, Flutter Entertainment Plc has put the ADM on notice warning that ‘tax increases have made it impossible to sustain the business’ – with the FTSE100 company stating that it will be ‘compelled to remove its Betfair exchange from the market’ should the ADM maintain its temporary tax charges.
Flutter has questioned how the ADM calculates its turnover metric for betting exchanges which is currently reported as the ‘sum of all amounts matched between lays and bets, minus the betting tax, to be calculated per each market’.
For Betfair, which dominates the Italian exchange marketplace by maintaining a 96% market share, Flutter stated that turnover is an unfair metric in which to calculate its tax duties.
The new turnover share, in addition to existing corporate taxes already paid, will lead to an overall tax of 111%, in-turn making Betfair exercise duties ‘structurally uneconomic’ within Italy.
Flutter has purposed that the ADM replace its new 0,50% turnover tax with an additional 3% to its GGR tax rate. If accepted, the final duty for betting exchanges would be established at a total 23% GGR duty.
Prior to enforcing the ‘Revival Decree’ taxes, Italian betting leadership had warned Minenna and the ADM that further tax increases would place certain bet types and verticals ‘at risk of extinction’ and would simply serve as ‘another gift to the black market’ looking to actively target the Italian consumer.
(News content provided by AgiproNews Italia)