SBC News EGBA: €7m licence fee ‘unwarranted’ in new Italian licence proposals

EGBA: €7m licence fee ‘unwarranted’ in new Italian licence proposals

The European Gaming and Betting Association (EGBA) has expressed its concerns over the proposed new Italian decree on online gambling.

Currently under discussion in the Council of Ministers, the decree would introduce a significant reorganisation of the sector, particularly regarding the cost of licence fees. 

Furthermore, the possible introduction of (quasi) prohibitive licensing regimes and fees also raises concerns on compliance with EU law, which EGBA believes will merit consideration.

In detail, recent reports suggest the decree will set an unprecedented €7m licence fee, far surpassing other EU Member States. 

The Association believes that such a substantial increase in the licence cost is ‘unwarranted’, particularly when compared to the country’s previous licensing tenders for online gambling operations. 

The proposed fee represents a 35-fold increase from the 2018 licence fee of €200,000 and triples the Italian authorities’ previous licence fee proposal of €2.5m, which was never implemented.

Maarten Haijer, EGBA Secretary General, commented: “The proposed increase in licensing fees is unparalleled and unheard of, it would make Italy the most expensive country in Europe to obtain an online gambling licence. 

“Together with the other restrictions in its gambling market, such as the local advertising ban, this proposed fee hike will make Italy a closed shop for new market entrants and lead to an exodus of existing licensees.”

EGBA stresses that this significant licence fee hike will have ‘severe consequences’, with the high fee possibly detering new market entrants and likely force existing licensees, especially smaller operators, out of the market. 

The association’s belief is that this would lead to a drastic cut in the number of licensed operators from the current 91 licensees to a ‘mere’ 15-20, contributing a significant increase in the size of the country’s online gambling black market – posing inherent risks for player protection.

“This also raises concerns on compliance with EU law,” Haijer continued. “We urge the Council of Ministers to reconsider the proposal, as it will make the country’s online gambling black market problem even worse, not better.”

Meanwhile, EGBA explained how Italy’s online gambling black market is already one of Europe’s largest, valued at over €1bn annually, stressing that the fee proposal will make this situation worse, with ‘grave implications’ for the protection of Italian players.

The body also highlighted that anticipated revenues from the proposed licences, even in the most optimistic scenario, range between €105-140m for the Italian state. 

EGBA suggested that implementing the current unused tender proposal of €2.5m, without the previously suggested limiting factors of 40 licensees and an auction mechanism, could yield a similar or higher tax revenue without significantly harming market competitiveness.

The Association concluded: “The primary goal of Italy’s gambling regulation should be the protection of players and fostering a fair and competitive market environment and, thus, EGBA urgently calls upon the Council of Ministers to reconsider the proposed punitive increase in licence fees. 

“By limiting competition to only a few operators and inadvertently bolstering the size of the black market, the proposal risks undermining player protection.”

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