Draghi exit sees Italy stumble on long-sought gambling reforms 

By | July 25, 2022

Italian gambling’s regulatory affairs have been left in limbo following last week’s resignation of Prime Minister Mario Draghi, which signals the likely break-up of Italy’s coalition government. 

Chaos followed Mario’s resignation, as President Sergio Mattarella called for Parliament to be dissolved and for a snap General Election to be brought forward to 25 September – a year ahead of schedule.

All government policy affairs have been abruptly suspended as Forza Italia and Lega Parties, the right-wing of a fragile coalition, refuse to work with the populist Five Star Movement.

A regulatory deadlock stands in the way of government agencies adopting the ‘Reorganisation Law’ proposed by the Ministry of the Economy.

At the start of the year, the Ministry of the Economy had published its ‘desired objectives’ to govern Italian gambling by implementing new sector reforms to “reduce problem gambling harms, eliminate black market activities and optimise tax incomes”.   

Positive developments saw the Ministry secure cross-party support for the Reorganisation Law, which refreshingly had avoided the roadblocks of partisan scrutiny, to be put forward to Draghi’s office for its final review, whose sign-off was required to schedule a Parliamentary vote.  

With no PM and Parliament dissolved, Italian gambling has yet again been sidelined on its regulatory future in which incumbents require definitive resolution on licensing concessions, tax and governance affairs.

The Ministry’s draft proposals had recommended a phased-out reduction of Italian gambling land-based venues (betting shop, arcades and bingo halls) – an outcome shared with market regulator the Agency of Customs and Monopolies (ADM).

Despite the land-based reduction, Italy’s domestic incumbents outlined their support for the Ministry’s reorganisation plans, on the proviso that amendments settle long-standing disputes on licensing concessions related to online gambling, retail machines and betting shop franchises.

Urgency is required on the matter as foreign and domestic operators have appealed against a botched ADM review that has led to online concessions expiring at the end of the year.     

As a snap election looms, Italian gambling is reported to favour a  ‘centre-right wing alliance’ formed by Forza Italia and Lega to take government and remove the “anti-gambling” Five Star Movement from holding any influence at the Palazzo Chigi.

The minority party of back-to-back coalition governments, Five Star’s hostility towards gambling has been deeply felt during the past five years in which Italian gambling has witnessed year-on-year tax rises and the enforcement of a blanket ban on TV advertising and sports sponsorships.

Though there can be no guarantee that the ‘Reorganisation Law’ survives beyond September – a government without Five Star influence will be seen as a beneficial outcome for the industry.

Meanwhile, a week of political chaos ended on a positive footnote for Italian gambling, as Draghi’s resignation saw Parliament dissolve the ‘working group on Sports Funding’ that had proposed for a further 1% turnover tax to be applied across all sports betting verticals.

Led by Italian Sports undersecretary Valentina Vezzali, the turnover tax had been recommended as a proposal to be applied to Draghi’s post-pandemic economic plan to tackle the challenges of rampant inflation.

Against Darghi’s orders,  Coalition Parties had feuded and failed to settle on how Italy should use post-pandemic funds and tackle inflation, cost of living challenges and the country’s relationship with Russia. 

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