Italy Implements Turnover Tax for Gambling Operators, Hopes to Raise €90 Million

The Italian government is looking to aid the National Sports system following a near three-month postponement of sports activities due to the coronavirus (COVID-19) outbreak. Funds are planned to be gained by a new tax applicable for all gambling operations in the country.

New Turnover Tax for Gambling Operators in Italy

A new turnover gambling tax has been introduced by the Italian government. Subject to the tax will be all gambling operators, regardless if they run online betting, virtual sports betting or land-based operations. The newly implemented tax is a part of the government’s care plan aiming to help the country’s sports recover from the novel coronavirus (COVID-19) spread in the country.

Initially planned as a 0.75% turnover tax, the accepted number was decreased to 0.5%. The Decree Law no. 34 was already signed into law last week following a publication in the Gazzetta Ufficiale which is the country’s official state journal where new laws are promulgated. The newly applied tax will help with the Fund for the Revitalization of the National Sports System which was created under the Ministry of Economy and Finance in Italy.

The fresh funds will be distributed for the use of the Ministry of Youth and Sports which will aid the recuperation of sports. Keeping in mind that the law was accepted as a temporary one, it’s expected to be active until December 31, 2021, with payments conducted on a quarterly basis. Italy’s Ministry of Economy and Financing is planning to raise some €40 million from the new tax for 2020 alone. Another €50 million are expected to be raised next year. According to the government plan, if the tax revenue targets are met, the law may be withdrawn earlier than the planned date.

Italy’s Gambling Industry Struggling in Recent Months

The Italian gambling industry disapproves of the newly accepted turnover tax. All of the sports betting operations, as well as online operations, have felt the impact of the coronavirus (COVID-19) spread in the country. To enhance the negative effect, country-wide as well as global sports events have been postponed since March.

Looking down to the numbers, Italy’s betting revenue was at €75.3 million. This marks a decrease of close to 60% when compared to February. Furthermore, the negative impact did not end there as numbers from April show revenue of €20.6 million, which is a staggering market decline of 72.7%.

The Lega Operatori di Gioco su canale Online (LOGiCO), which is Italy’s operator association, deemed the new turnover tax as out of place. According to LOGiCO the tax is unsuitable from both legal and economic point of view.

Moreno Marasco, LOGiCO president, pointed out that when the new tax is combined with the already existing gross gaming revenue tax in the end the gambling industry in the country would effectively pay double taxes.

Marasco continued by expressing concern that such move can only result in benefits for the unregulated market operators, which undoubtedly results in more harm for the Italian gambling industry. Meanwhile, partypoker returned to Italy with a new license in April, although many established companies, including Playtech, had to shut down retail business in the country.