Italy – Taxation on betting collection is nothing more than a display-of-wealth tax on bettors

During the first COVID-19 emergency period in Italy early in 2020, the Italian government introduced an additional 0.5% tax on sports and horse betting collection, as well as virtual betting and betting exchange, in order for the state to finance a fund dedicated to sports (notably: sports actors, sports amateur clubs and sports-competition organisers) – the so-called “Save Sport Fund”.

This additional tax and the relevant implementation notices issued by, respectively, the Minister of Sports and the director of the Italian gambling regulator ADM, have been challenged before the Administrative Court of Rome by different operators.

On one side, betting licensees Lottomatica Scommesse S.r.l., Goldbet S.p.A and Sisal Entertainment S.p.A requested that the Court revoke this betting-collection applicability. On the other side, Betfair Italia s.r.l., Betflag S.r.l and the horse racetracks association Federippodormi requested separately that the Court revisit the additional taxation field of application, as well as its calculation rollout, so as to exclude betting exchange and horse betting.

More specifically, all appeals were first of all aimed at obtaining a suspension, in full or part, of the additional tax on sports betting. All the operators asked the Court to make a provisional decision before proceeding to consider the deeper legal grounds of their claims. The Court did make a provisional decision last month in response to the appeals: It rejected all requests.

According to the Court, the tax-policy choices of an EU member state, while having disincentive effects, may be questioned only if they are not supported by reasons of general interest, or appear to be discriminatory and disproportionate. In other words, the Court ruled that any reason of general public interest prevails over the interest of private individuals, even if it is decidedly prejudicial to them; the only shield offered to betting licensees, in the interest of balancing the parties, is given by the observance of the principle of proportionality.

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