The new Director-General of the Italian ADM Customs and Monopolies Department, Marcello Minenna, was urged to exempt horseracing and approved betting exchanges from the new 0.5 percent turnover tax increase in Italy that will be imposed across all retail, wireless and virtual sports wagering verticals.
This summer, after the Parliament adopted a package of fiscal measures implementing the ‘Revival Decree’, a federal mandate aimed at promoting the recovery of Italian business and social services after COVID-19, Italian betting’s latest tax increase was allowed.
The ADM raised betting turnover duties by 0.5 percent as a temporary step, aiming to collect EUR 90 million to ‘support the revitalization of sports,’ a figure that was instantly challenged by bookmakers and operators returning from lockdown to company.
Representing the embattled Ippica (horse racing market) of Italy, Agricultural Undersecretary Giuseppe L’Abbate warned Minenna and the ADM that the ‘new standard’ could not be embraced by an underfunded racing sector.
In a written statement to the ADM L’Abbate detailed: “The Decree is clearly addressed to the sport sector, not to horse racing. A new tax will affect our attempts to support the Ippica.”
Minenna told Italian racing that Sports Minister Vicenzo Spadafora would soon explain whether or not racing concessions must be included in the duty after having held face-to – face talks with L’Abbate.
Meanwhile, Flutter Entertainment Plc has warned the ADM that ‘tax increases have made it impossible to sustain the business’ – with the FTSE100 company reporting that if the ADM retains its temporary tax charges, it would be’ compelled to remove its Betfair exchange from the market’
Flutter asked how the ADM measures its betting exchange turnover metric, which is currently reported as the ‘sum of all amounts matched between lays and bets minus the betting tax, to be calculated per each market’.
For Betfair, which, by holding a 96 percent market share, dominates the Italian exchange market, Flutter claimed that turnover was an unreasonable measure for the measurement of its tax duties.
In addition to current corporate taxes already charged, the new turnover share will lead to an total tax of 111 percent, which will make Betfair exercise structurally uneconomic duties within Italy in turn.
Flutter asked ADM to substitute its temporary levy with an equal GGR tax rate with betting exchanges, which is currently set at 20 percent of turnover.
Italian betting management had warned Minenna and the ADM before imposing the ‘Revival Decree’ taxes that more tax rises would put some bet forms and verticals ‘at risk of extinction’ and would simply serve as ‘another gift to the black market’ seeking to aggressively target the Italian customer.