Italy Approves New Gambling Tax Rates

Italian government approved the new gambling taxes during last Sunday's meeting which should be written into the official legislature before the year ends.

The country's Senate has green-lighted the government's new budget after a series of revisions by a landslide – 167 against 78, with three abstentions, was the final vote. The budget will be put to vote on Friday, after it has been reviewed by the Chamber of Deputies and the Budget Committee.

New Budget, New Taxes

The new budget also takes gambling into consideration, after last week's abrupt introduction of plans to raise the tax rates for the industry...

...Online casino revenue will be taxed at 25% instead of 20%, online sports betting – 24% (instead of 22%), virtual betting 22% (formerly 20%) and land-based sports betting 20% instead of 18%. The taxes go in effect January 1st.

Video lottery terminal taxes were also increased by 1.25 points, with payouts falling to 84%. Amusement with prizes machine revenue tax will rise by 1.35 points, with minimum payout rates on these falling to 68%.

It is expected that the land-based gambling industry will generate a lion's share of taxes – Italian government estimates supplemental €770 million. Giuseppe Conte, the country's Premier, has said, answering shouts of outrage and protest by the operators, that new tax rates were introduced to “restore some equity” to the codes.

Playtech On the Loss

Apparently, Italian officials were really looking forward to this amendment of the budget...

...Deputy premier, Luigi di Maio, has even said that Italy now has the most taxed gambling sector in whole continent and that it was time to “take money from those who in recent years had taken too much money from Italians.”

Earlier this year, we reported on Playtech's acquisition of the Italian omni-channel giant Snaitech after receiving an approval from the nation's regulator. The developer obtained the Milan-based company's stakes for €1 billion.

After the new budget was outlined and presented by the government, Playtech has sent an urgent notice to its investors this Monday, warning them that full-year earnings will be cut by circa €20-25 million. This quite concerned the investors, which caused Playtech's share price to plummet by 7%. In general, 2018 was not a good year for the company market-wise as their shares dropped from 870p to 370p.

Flurry of Activity Despite Tough Conditions

Italy's new conservative government has done a lot to make life more difficult for operators interested in doing business in this country...

...However, despite that, they're not giving up on it on the account of a major market of one of the most populous countries in Europe. The beginning of December saw two major brands enter the Italian territories. First it was Playtech's subsidiary, Quickspin, whose deal with PokerStars allowed them to enter the market.

“The agreement was one of the supplier’s most significant in recent times. We are delighted to have secured a deal with Pokerstars. Going live with them is exciting for us and continues our exciting plans for expansion,” said Daniel Lindberg, company's CEO.

GAN followed soon, after striking a deal with Goldbet – an operator who has almost 900 betting shops all throughout the country.

Source:

“Italy's gambling tax hikes to do damage to Playtech's earnings”, Steven Stradbrooke, calvinayre.com, December 25, 2018.