EGBA says Italian draft law could breach consumer protection laws

The European Gaming and Betting Association (EGBA) has accused the Italian authorities of risking a spike in illegal gambling if they pursue proposals to slash the number of online gambling licensees and massively increase fees.

EGBA has called on the Italian gaming authority, Agenzia Delle Dogane e Dei Monopoli (ADM), to notify the European Commission of a new draft law which it contends could be in contravention of European Union consumer protection rules.

It said a new tender for nine-year online gambling concessions to be introduced from 2023 would limit the number of online gambling licensees in the country to 40 from the present figure of 120. It would also increase online licensing fees to at least €2.5m, representing a ten-fold rise. Licensing fees would also be determined through an auction process rather than through a fixed cost as is deployed in other European jurisdictions.

“While EGBA appreciates the discretion, within certain boundaries, of Member States to set the cost for gambling licences in their jurisdiction, this is an extremely high concession fee and, coupled with the drastic reduction of the number of online gambling licensees, would be a major barrier to a well-functioning market,” EGBA said in a statement.

“This could potentially also, EGBA believes, weaken the viability of the country’s regulated and licensed online gambling market, in favour of unlicensed operators who can easily be found online by players in Italy.”

EGBA said Italy’s gaming authority has a duty to forward the draft law to the European Commission under the requirements of the so-called notification directive, a process which is intended to ensure that proposed national laws are in full compliance with EU law. It contends that a rise in gambling via unlicensed operators means players would no longer be safeguarded by Italian consumer protection and gambling legislation, which would be contrary to the stated objective of the regulated online gambling market in Italy.

“We have asked the Italian authorities to duly notify the draft legislation to the European Commission,” said Maarten Haijer, EGBA’s secretary general.

“Notification is required by European law, and failure to do so will render the law inapplicable to Italian-licensed companies and its citizens. The Commission’s careful scrutiny of this proposal is needed, also to make sure that the draft legislation will not be contrary to the consumer protection objectives of the Italian online gambling legislation.”

Italy’s online gambling market is in a strong position despite the ban on nearly all gambling-related marketing under the 2019 Dignity Decree. Italy’s igaming market experienced its second-best month ever in February 2021, thanks to record online sports betting revenue at a time when retail betting shops were closed. According to figures supplied by Ficom Leisure to iGB, revenue across all online verticals ticked up 4.6% from January to €351.2m, just behind the record set in December 2020.

Plans to reduce the number of online gambling licensees were first mooted by the Five Star Movement-Democratic Party coalition government in 2019. At that time it was looking at cutting the figure to 50 with fees costing €2m.

ADM began issuing gaming licences in February 2019 after the application window opened in January 2018. Licences are valid until December 2022.

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