Italian MP’s Approve New Controversial Turnover Tax

To the dismay of licenced incumbents, the Italian parliament has enacted an immediate ‘turnover tax’ on betting and virtual sports wagers.

Publishing the state gazette last week confirmed that MPs had supported amendments introducing a new ‘temporary’ 0.5 percent turnover tax across all betting-related verticals – online, retail and virtual sports content.

The turnover tax is implemented as a set of first steps establishing the ‘Revival Decree’ of the government, a initiative that aims to collect funds to help Italian industry and society’s post-coronavirus recovery.

First proposals saw Italian MPs advocate for the sanctioning of a 0.75 percent betting turnover tax to raise funds for Italian sports and its related growth programmes.

Settling on final changes, the Italian Government will introduce a new betting turnover tax of 0.50 percent, which will be ‘temporarily applied’ until 31 December 2021.

The temporary tax charge would allow PM Giuseppe Conte to set up a new ‘sports relief fund’ aimed at raising €90 m by 2021, funded directly from Italy’s approved betting incumbents.

In response to additional tax burdens, betting leadership has questioned the rationale of the Conte government’s action plan to tax an industry that has been in complete lockdown since March and faces a tough reopening of retail outlets as of 14 June.

The dire consequences of lockdown saw Italian sports betting (retail and online) report a 72 percent drop in revenue between March and April, with new ADM Director-General Marcello Minenna stressing that it will take the sector to recover ‘at least a year.’

In introducing the new temporary fee, Italy becomes one of the highest-taxed regulated sports betting markets in Europe, where incumbents now pay GGR betting duties of 20 percent for retail, 22 percent for virtual games and 24 percent for online betting.

Acadi and Sistema Gioco, a retail betting agency, cautioned the government against imposing an unworkable tax structure that would place a likely GGR tax burden of +30 percent across its licenced verticals.

Meanwhile, Moreno Marasco – the director of the Italian online gambling trade association LOGiCO – said that with its new tax plan, the government had ‘gifted the underworld.’

Marasco expressed the scepticism of Italian betting that a turnover tax to save Italian sports had been allowed. As governing bodies had been urging the government to join European counterparts in setting up a ‘guaranteed loan system’ to safeguard support for Italian sports clubs.

Measures of the Revival Decree undergo their final Senate readings before being ratified federally. Betting leadership hangs on the hopes that the Senate will review changes to enforce the turnover tax as an additional GGR charge for an exhausted industry.