Online Gambling Regulation in Italy

“Safe, Legal and Responsible Gaming”

The Italian Government follows many European countries in regards to their extensive gambling legislation. The State has exclusive power to provide the rights to gamble. The government has increased the responsibilities of a pre-existing government agency, AAMS (Amministrazione Autonoma dei Monopoli di Stado – Autonomous Administration of the State Monopolies) to include the gambling market. It has entrusted the AAMS with all gambling matters, from issuing gambling licences to enforcing all administrative legal aspects of gambling. All gaming, betting, lotteries and games of chance are to be offered, organised, and managed in compliance with specific laws, regulations, and licences. Violation of these conditions has serious consequences, including: criminal trial, imprisonment, fines, forfeitures, bails, parole and other restrictions of freedom (such as being prohibited from entering gambling halls). Additionally, other violations of Italy’s gambling laws can be punished via administrative actions such as monetary fines or suspension or withdrawal of business licences.

Italy has experienced a shift from banning all gambling to being differentiating between permissible and illegitimate gambling.

Over the last five years Italy has proved its pioneering leading approach to online gaming legislation. The turning point in gambling legislation of Italy is the reform initiated in 20 targeting the following issues:

• Legalisation of interactive peer-to-peer remote betting on fixed odds (betting exchange)
• Legalisation of real-money remote skill games
• Possibility for operators based in any EU and EFTA country and even in an offshore jurisdiction, to apply for an Italian gaming license provided they comply with certain fit & proper requirements and re-locate their gaming servers to Italy.
• New license tender aimed at rearranging the offline network of betting shops and betting corners as well as legalizing online gaming is still under the AAMS-granted remote gaming license subject to payment of a one-off license fee of €300,000.

The process of tender was completed on 28 December 2006. On the whole 33 remote gaming licenses were also granted mainly to large foreign-based online gaming operators such as Betfair, Unibet, William Hill, Ladbrokes, Intralot, and 888.

Finance Act 2007(FA07) marked the next stage of promoting secure online gambling in Italy. According to the document, "Card games of whichever type are deemed skill-based games provided:

• they are organized in the form of a tournament, and
• the stake is limited to the entry fee charged to play in the tournament".

The latter provision was aimed at legalizing online poker tournaments that automatically fell into skill game type.

The other FA07 provision regards the restrictions against foreign-based online gaming sites accepting bets from residents of Italy without holding a relevant AAMS-granted license. Originally, they were introduced in 2006 and finally implemented by an AAMS decree of February 2006 accompanied by a 500-plus blacklist of gaming sites considered “illegal”. Moreover, the local Internet Service Provided were obliged to deny access to them from Italy, otherwise, they would be subject to rigorous sanctions.

The newly-introduced policy proved being rather efficient. The legal gaming business was growing steadily (the first 9 months of 2010 resulted in a total turnover of nearly €44bln, up by 12,82% over the previous year), whereas the blacklist restrictions significantly reduced providing ‘.com’ gaming services to Italian residents. Moreover, a vast majority of the international online gaming operators over the last three years preferred to seek an AAMS license to become fully legal in Italy.

In December 2007, the Italian Government sent proposals to Brussels that, according to Quirio Mancini of Sinisi Ceschini Manchini & Partners, were aimed at revising the country’s licensing requirements to make them more EU-friendly. In return, Brussels might consider dropping the infringement proceedings that were initiated against Italy for its blacklisting and blocking of gambling websites in 2006. These proposed revisions included:

• Removal of the original stipulation that licence applicants had to establish a company in Italy; under the new riles, it can be a company anywhere else in the EU;
• Previously, gaming servers also had to be based in Italy; again these can now be located outside Italy in the EU;
• The licence fee would be reduced and would continue to decrease for every year the licence is renewed.

“The Abruzzo Decree” dated April, 28 2009 has become a new landmark in Italian gaming reform process and concerned the following:

1. Legalisation of online fixed odds games of chance (online casinos and Vegas-style games)
2.  Legalisation of online poker and ring games
3. Mandate to AAMS to regulate betting exchange, betting on virtual events and video lottery games (“VLTs”).
4. Introduction of an unprecedented profit-based tax regime with a flat 20% rate applying to all new games listed above other than the VLTs. This provision is of paramount importance as it paves the way to the launch of games that otherwise could have never been offered in Italy given its penalizing turnover-based tax regime which however will continue to apply to sports and horse races betting, bingo, lotteries and skill games (including online poker tournaments that will thus continue to be taxed at 3% of the total tournament buy-ins sold by the operator).

New possibilities for online gaming industry in Italia have been opened in February 2011 by passing a ‘Comunitaria’ decree legalizing online casino and poker cash games in the country.

According to the new decree:

• Online poker satellite and tournaments are allowed up to €250, and
• At least 90% of the amount collected from players must be paid back.

This document enables both the current operators and the entrants to the Italian market to offer casino games and cash poker games, only after having made their platform fully compliant with the requirements of the ‘Comunitaria’ decree and having submitted to AAMS the documentation on their platform and their company required by the decree. Such operators will need within a 30-day period to notify AAMS about their intention to continue offering games and then they will have a 90-day period to fulfill any requirements specified in the ‘Comunitaria’ decree.

Once the application for the licence is submitted to AAMS, the regulator will then have three months to review the documentation and issue the licence. But the licence itself will not enable operators to immediately start providing the licensed games. They will first  go through an authorization procedure, that in case of casino games, card games and skill games, also requires the previous certification of the platform and of each game by a certification entity accredited with AAMS (the so called "EVA").

For more details about obtaining a remote gaming license in Italy, please refer to AAMS.