Italy ended its application period for new gambling licenses recently, and new regulations mean the number of operators will be greatly reduced.
New updates require operators to pay upfront costs of €7 million ($8 million) to obtain a gambling license, referred to as a remote gambling concession in Italy. The fee is per license, so operators looking to run an online casino and sports betting site would have to pay double.
The country’s gambling regulator, the Customs and Monopolies Agency – Agenzia delle Dogane e dei Monopoli in Italian – (ADM) will decide on which operators will be granted licenses later this summer after the application period ended on May 30.
Significant drop of operators
It is expected that the number of licenses issued could be as low as 33, compared to the current 81. In 2018, there were 93 applications, which led to 81 licenses being issued. This time around, it is believed there have been around 50 applications submitted.
Moreno Marasco, the president of Italy’s LOGiCO online gambling association, commented, “This is a significant drop, despite the Italian market’s exponential growth in both revenues and legal operators.”
Previously, licenses cost only €250,000 ($287,000), which allowed smaller operators access to Europe’s largest gambling market. The industry is valued at over €5 billion ($6.91 billion), but the high fee to obtain a license has priced many out of the market.
Additionally, under new regulations, operators will pay 0.5% more on taxes. There is now a 24.5% tax rate on sports betting revenue, and 25.5% on casino revenue. This small increase could lead to an additional €481 million per year for the country.
The tax on fixed odds horse racing betting has fallen significantly, however, with operators now paying 20.5% compared to the previous rate of 43%. This is an attempt to revive the industry, which has been struggling.
Large operators to dominate the market
Christian Tirabassi, founder and senior partner at M&A advisory firm Ficom Leisure, commented that he sees the reforms as a logical step and expects large operators to dominate the market going forward. This is said to be intentional as the government favors big companies that will comply with anti-money laundering (AML) regulations.
Torabassi commented, “There are very small companies that were able to operate in a market that was [worth] €4 billion at the time, now €5 billion, with an investment of €250,000,”
“The regulator decided that this is not acceptable. You don’t want to put a delicate operation like this in the hands of a company without financial strength.”
Flutter recently acquired Snai in Italy, adding to its presence in the country through Sisal. The gambling giant is expected to control around 30% of the market alone, with other large operators such as Lottomatica, Entain, and bet365 expected to strengthen their positions.
“Post-tender, we expect large, integrated, multi-product, multi-channel companies to dominate the market,” Tirabassi explained.
“The reform has brought the price of the licence to a normal level,” he added. “The previous price – how cheap it was – that was the abnormal part. Add to that the stricter requirements and the fact that, to be successful in Italy, you need to be omnichannel. All of that has created natural selection in favour of larger corporations.”
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
