Italian tax hikes result in less taxes, experts warn

Italy, tax, hikes, gaming, TV
Share this article

Fortunes go from bad to worse for Italian gaming as prime minister Giuseppe Conte approves not one, but two new tax hikes already in 2019. Experts are already warning however that in squeezing too hard and too fast, this government could be counting eggs before they’ve hatched.

Having already approved a ban on all gambling sports sponsorship and advertising – TV, print and online – the unlikely coalition partnership between the right-wing Liga Nord and the left-wing Five Star Movement is ploughing on with tax rises across all industry verticals.
In a budget meeting on the eve of Christmas Italy’s senate announced a fresh pack- age of tax hikes designed to “relieve the pressure” on Italian citizens, by extracting billions of euros form certain sectors.
“We are not increasing the tax burden on citizens,” assured the Italian prime minister Giuseppe Conte, “but on banks, on insurance, and on gambling.”
According to independent calculations, the changes will, over three years, seek E5.6bn from banks and insurance and E2.1bn from gambling. However, the National Council of Accountants has warned that these tax hikes will inevitably be passed down to consumers in terms of higher prices.
“It will be up to the Italians to judge us,” was the reply from deputy prime minister Matteo Salvini, “when their paycheck or their pension arrives.
“They will have more money in 2019 compared to 2018”.
For gambling, the so-called Budget Law levies an extra two percent on GGY across all sports betting products. Online sportsbook goes up from 22 percent to 24 percent; while retails revenues rise from 18-20 percent; and virtual sports from 20 to 22 percent.
The machine sector will see tax hikes there too. Taxes on amusement with prizes machines (AWPs) and video lottery terminal (VLTs) will rise by 1.35 and 1.25 percent respectively.
But then not more than 20 days later, the PM signed off a new pension reform plan, “Quota 100” that requires slot machine operators to pay an immediate additional turnover tax of 0.65 percent – bringing their overall liability to 21.25 percent.
The industry reaction has been understandably forlorn. “We realize that the Government – throttled by the EU – needs to make money,” said Moreno Marasco, president of Italian gaming operator association, Logico, But these new tax rates “will simply move the flow of play to those operators who do not have the Italian concession.”
He predicts the state will lose, rather than gain revenues, but what is more concerning is that the state already knows this.
“In my opinion, there could be a rethinking,” Marasco replies. “But perhaps the Government’s intention is precisely to reduce the number of operators.”
Not only the industry but various independent experts have expressed concern that the coalition is cutting too many chunks out of the legal market too quickly, forgetting about the mafia, which is still active, particularly in the south, and simply waiting to step in and pick up the slack.
“Organised crime still runs clandestine gambling dens,” reminds Giovanni Russo, Assistant Prosecutor of the National Anti-Mafia Directorate. “No longer characterised by messy card rooms and tattered accounting books, but modern computers connected to the internet running online casinos and underground lotteries.”
Even the Bank of Italy has suggested that by making the regulated market less attractive, more revenues may end up offshore than in the treasury. “Online gaming is inherently cross-border, and gaming sites that are an alternative to those authorized are still easily accessible,” the central bank warned. “The possible result is an alternative black market for online gaming, whose size is hard to estimate.”

Share this article