Opinion: Where next for Italian sports betting?

From the launch of the sports betting sector in Italy operators have been constrained to the events and odds identified, approved and verified by the regulator. So the approval of regulations allowing bets and events not included in the official schedule issued by the regulator (the so called “palinsesto ufficiale”) had been seen by operators as a crucial milestone in the growth of the Italian sports betting market.

Many operators believed they might finally be able to offer under their Italian licence the same types of attractive odds and events available on dot.com platforms. Also, this change might have pushed a considerable number of Italian players who don’t want to give up their favourite types of odds/events to switch from the black market to the licensed market.

But despite the tireless summer spent by Italian licensed operators filing hundreds of project documents relating to each customised bet and event that they wanted to offer in order to be ready for the beginning of the Italian football championship, it appears at the moment that none of these customised bets/events have been approved yet. However, apparently the Italian regulator has been very active in introducing new types of bets as part of its official schedule!

Indeed, the general comment – and hope – from the operators was that the coming into force of the regulations on customised bets would have led the regulator to quickly dismiss the system relying on the official schedule. This is what happened in Spain where the operational restrictions imposed by the official schedule fostered the regulator to get rid of it in a quite short term.

The position of the regulator might be that the system based on the official schedule can offer a higher level of guarantees to players given that the regulator has to validate the results of events. However, because of the severe monitoring systems prescribed by Italian gaming laws and the possibility for players to easily challenge operators’ misconducts, it seems honestly unlikely that any operator may abuse of the liberty given by an unrestricted regime just because they are allowed to certify the results of the events.

On the contrary, the official schedule creates relevant operational issues in terms of delay in the payment of bets and in the launch of new markets and does not allow operators to compete on the quality of their sports betting offering. Hopefully the delays in the launch of customizsd bets/events are only due to the roll-out process and they will be quickly approved in the next days. However, in the meantime such delays are helping the growth of the black market with its more competitive offering.

Indeed, the Italian black market still represents a major issue in Italy and the domain name filtering system of unlicensed operators has showed not to be an effective tool against it. According to market players, the more effective solution against the black market might come from the lowering of the current tax regime for sports betting whose tax levy is based on turnover as opposed to casino games and cash poker games that have a tax regime based on gross profits.

It appears clear even from the failure of the French online gaming market that a high tax regime for the gaming sector is not beneficial to either operators that for a large part have gradually left the French market and for the State itself that might gain better tax entries from a gross profit tax regime. It will be interesting the see the status of the Italian sports betting market in six months time as there are huge potentials that have yet to be properly exploited.

Giulio Coraggio is a Senior Counsel at the law firm DLA Piper Italy