To the dismay of licensed incumbents, Italy’s parliament has approved the introduction of an emergency ‘turnover tax’ on betting and virtual sports wagers.
The publishing of last week’s state gazette confirmed that MPs had backed amendments introducing a new ‘temporary’ 0.5% turnover tax across all betting-related verticals – online, retail and virtual sports content.
The turnover tax is introduced as a series of first measures forming the government’s ‘Revival Decree’, a mandate which seeks to raise funds supporting the post-coronavirus recovery of Italian business and society.
First drafts saw Italian MPs call for a 0.75% betting turnover tax to be sanctioned securing funds for Italian sports and its associated development programmes.
Settling on final amendments, the Italian government will establish a new 0.50% betting turnover tax, which will be ‘temporarily applied’ until 31 December 2021.
The temporary tax charge will allow PM Giuseppe Conte to establish a new ‘sports relief fund’ which aims to raise €90m by 2021, directly financed by Italy’s licensed betting incumbents.
Reacting to further tax burdens, betting leadership has questioned the logic of the Conte government’s action plan in taxing an industry that has been in full complete lockdown since March and faces a tough reopening of retail venues from 14 June.
The dire consequences of lockdown saw Italian sports betting (retail and online) record a 72% revenue decrease during March and April, with new ADM Director-General Marcello Minenna emphasising that it would take ‘at least a year’ for the sector to recover.
Applying its new temporary charge, Italy becomes one of Europe’s highest-taxed regulated sports betting markets, in which incumbents already pay GGR betting duties of 20% for retail, 22% for virtual games and 24% for online betting.
Retail betting trade body’s Acadi and Sistema Gioco warned the government against enforcing an unworkable tax framework which would impose a likely +30% GGR tax burden across its licensed verticals.
Meanwhile, Moreno Marasco – Director of Italian online gambling trade association LOGiCO – stated that the government had ‘gifted the underworld’ with its new tax plan.
Marasco underlined Italian betting’s disbelief that a turnover tax had been sanctioned to save Italian sports. As governing bodies had urged the government to follow European counterparts in establishing a ‘guaranteed loan framework’ to safeguard funding for Italian sports clubs.
Revival Decree measures face their final readings by the Senate before being federally ratified. Betting leadership hangs on the hopes that the Senate will review amendments to enforce the turnover tax as a further GGR charge… slim pickings for an exhausted industry.