Opinion: Italian slots finally get green light
Giulio Coraggio of DLA Piper Italy examines the motives behind the Italian regulator's decision to legalise online slots, and discusses the effect the launch will have on already-declining licensed products.
With most of the online operators focused on Spain, Italy might have felt a bit neglected and AAMS did not miss the opportunity to bring back the light on them adopting the major regulatory change of this year.
Following considerable delays, AAMS authorized operators to file applications to have online slots approved. However, in order to avoid first movers having a considerable advantage over other operators, they set a 3 December launch date.
Needless to say that this change might considerably increase the turnover of the Italian online gaming market that “ following the launch of cash poker games and non-slot casino games “ saw a substantial boost, driven mainly by cash poker games which reached a turnover of 3.1bn in the first four months of 2012. Together with skill games, poker tournament games and non-slot casino games these represent 65.4% of the entire online gaming market.
Given that online slots represent at least 50 – 60% of the turnover for most of casino operators it does not seem too optimistic to predict that the turnover of casino games will reach the same results achieved by poker.
But what are the reasons behind AAMS’ decision? The rumors of last months about an increase of the taxation for casino and cash poker games and the recent earthquake in Emilia Romagna might have led AAMS to the conclusion that higher tax entries may be achieved rather than through an increase in the taxation that would hamper games, through an increase of the turnover of the market as a consequence of the launch of online slots.
At the same time video lottery operators that initially considered online slots as a threat to their business due to the lower taxation and the higher RNG. The recent fines issued against video lottery operators might have led them to the conclusion that online slots can be a new source of income for them since most of these companies are also active in the online sector.
What are the consequences for the other online games? Following the launch of cash poker and non-slot casino games, bingo and sports betting experienced a substantial decline in their turnover, but AAMS is trying to support these games through a decree recently notified to the European Commission allowing the placing of bets that are not included in the official AAMS schedule (the “palinsesto“) and the upcoming decree allowing operators to offer new variations of bingo. However, in my view the future of these games will depend heavily on the applicable tax regime and therefore on whether these games will switch to a tax on gross profit.
Operators will struggle during the next months in order to be ready for the 3rd of December. Also, we will see whether AAMS will re-start issuing new licenses to allow late comers to enter into the market.
2013 is likely to be another exciting year for the Italian online market and we will see which operator will win the new battle.