Italy’s latest Government measures on gambling: new tax increase for slots machines, reduced appeal for 10&Lotto while tightening up sanctions for illegal gambling operators

In order to finance the Citizenship income, the Italian Government has introduced new provisions for the gambling sector with art. 27 Law Decree no. 4/2019 which entered into force last 29 January. Specifically, it sets forth:

  • a compulsory deduction on player’s winning for the lottery product “10&Lotto” and connected games is increased from 8% to 11%, starting from 1st July 2019;
  • a new increase in the tax rate for AWP (amusement with low prizes machines) thus turning to 21,25% of the collection. To put things into context, AWP already suffered two relevant previous tax increase with the current Government. The first tax increase was in July 2018, with the Dignity Decree, in order to compensate the loss of revenues expected from the advertising and sponsoring ban: in that case, the tax turned to 19,25%, starting from 1 September 2018. A second tax increase was introduced less than a month ago – in December 2018 with the Budget Law for 2019 – where the tax rate turned to an additional 1,35%;
  • a twofold increase of the one-off management fee per machine;
  • a 10% increase in the first yearly tranches of tax payment;
  • stricter sanctions against illegal operators that offer illegal gambling also through gambling machines, where the imprisonment turns from between 3/6 months to 3/ 6 years and the administrative fine turns from € 20k to € 50k. The Law Decree empowers the Italian Gambling Authority – ADM, to cooperate with the Italian finance police corp. with the aim to enhance contrast the illegal operators active in Italy.

While the new measures to contrast illegal gambling are more than welcomed and long-awaited, the other provisions on gambling show once more the negative attitude of the Italian Government against lotteries and gambling products reducing the appeal for players and increasing taxation.  Will that strategy work? In any case, this Law Decree needs now to be voted by the Parliament within next 29 March 2019, otherwise it will be null and void.

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