Italy Gambling Reforms Delayed by Government Turmoil, Could Hurt Operators

Posted on: July 15, 2022, 10:39h. 

Last updated on: July 15, 2022, 11:56h.

Italian Prime Minister Mario Draghi resigned yesterday, only to have President Sergio Mattarella tell him he couldn’t. The Italian government appears to be in a state of chaos right now, which could ultimately impact the future of gambling in the country.

Italian Prime Minister Mario Draghi
Italian Prime Minister Mario Draghi addressing Parliament. The country’s government is currently unstable, which could lead to changes in gambling reform. (Image: Bloomberg)

For the past several years, Italy has been working on updating its gambling laws, like many other countries. And just like those other countries, it faces a monumental task. Unfortunately, the current political situation isn’t helping.

Draghi said yesterday that he was going to resign because of a falling out he had with the Five Star Movement (M5S). That’s the same political group he demanded to be involved in the new coalition government last year. After Mattarella refused to accept the resignation, Italy’s government avoided a collapse like that in the UK and the resignation of Prime Minister Boris Johnson. However, it doesn’t mean the situation is stable.

Questions Over Italy’s Gambling Future

Draghi, a former president of the European Central Bank, became Italy’s Prime Minister at the request of Mattarella. The appointment was an opportunity for the country to bring in a financial and economic heavyweight to help it recover from the COVID-19 pandemic.

However, some of the policies he has sought have not found enough support. That’s even though he helped the euro stay afloat during the financial recession a decade ago. But some politicians don’t believe he is making the right judgment calls as he tries to introduce fiscal policies in Italy.

Draghi indicated yesterday that there was no more “national unity majority” in the government, and that the “pact of trust underlying the government’s action has failed.” As a result, and until the government can right the political ship, many reforms may have to be put on the back burner, just like they have been in the UK.

If this were to happen, it could cause issues with gaming licenses. While sports betting and land-based operators just received a two-year extension, time is running out for other operators.

In 2016, Italy’s budget law led to four-year licenses for certain remote gaming operators. However, this was later amended to make all operators’ licenses expire as of December 31, 2022. After Italy’s Customs and Monopolies Agency (ADM, for its Italian acronym) attempted to pull some licenses early, a court ordered it to back off. Instead, it confirmed that all licenses were valid until the end of this year.

As a result, all remote gambling licenses expire at the end of this year. After that, Italy must hold a new tender. But this might require the introduction of the new legal framework first.

Draghi Could Still Call It Quits

Although Mattarella would prefer that he didn’t, Draghi could still leave. He is going to address parliament next week, possibly with an update and a request for a vote of confidence.

If Draghi leaves, it might trigger an early election in the country. In turn, this could also force the government to switch gears regarding gaming reform.

Italy, like many countries, is going through a period of adjustment. Draghi had hoped a cost-of-living bill he designed would do enough to counter the pressure. But M5S wants him to do more.

There are concerns that the skyrocketing costs of energy, food, and other everyday purchases are going to spiral out of control. Were that to happen, discretionary spending on things like gambling will plummet.

Land-based gambling concessions were going to expire as well before the ADM stepped in. It just issued an extension to the segment until June 29 of next year.

This is a direct result of the delay in the tender process. However, Italy’s remote gambling segment, barring any regulatory intervention, cannot receive another extension.