Eurispes, Public gaming and only ‘partial’ reorganisation: the risks for users, Italian companies and tax revenues

The process that will lead to the approval of the legislative decree with which the government intends to launch the long-awaited reorganisation of the public gaming sector is underway. The Government’s intervention has focused in particular on online, on ‘remote’ games only, leaving aside, for the time being, the physical game. This dual track of intervention, however, risks creating imbalances to the advantage of illegal systems. Added to this is the need to prepare a decisive intervention to resolve the numerous problems that afflict the territorial gaming offer without underestimating, at the same time, the impact of the reform on the Italian companies that make up the legal market with the relative employment effects.

In fact, data indicate an exponential growth of online gambling, and this certainly makes it necessary to pay attention to it: in 2022, ‘physical’ collection amounted to 63 billion, while online collection reached 73 billion (+373% compared to 2012): with a forecast to reach approximately 83.5 billion in 2023.

The Draft Decree thus establishes the new costs of online concessions: a one-off fee of 7 million euros for each 9-year concession, while previous concessions were to be paid around 250,000 euros. The risk of this measure is that it will result in a weakening of user protection, through a significant contraction of the perimeter of the legal market, currently occupied by 93 concessionaires, and, in parallel, revitalise the illegal offer of online operators without a concession (the so-called .coms). Approximately 80% of online gambling collection is headed by 20 concessionaires, the Government hypothesises that at least 30 of the medium-sized companies already operating (out of a total of 93) could find it profitable to participate in the tender, while bearing a concessionary burden that has grown 28 times (Regulatory Impact Analysis, 4.2. Specific Impacts, A. Effects on SMEs).

On the other hand, on the margins of the data, there is a strong risk that the new European tender, which should be concluded by the end of the year, may further benefit foreign and multinational companies to the detriment of the small and medium-sized companies that have so far been involved in the online gaming industry (from PVRs to service companies, to the same medium-sized concessionaires referred to by the Government). From a revenue point of view, the new tender for online collection is expected to generate revenues of approximately 350 million euros. However, it should be remembered that the State’s revenue from the sector comes mostly from levies on physical gaming. Relative to 2022, it provided the State’s coffers with 9.2 billion, against 1 billion contributed by the online gaming area: a further migration from physical to online, induced also by the competitive advantage recorded by the online market, which can count on a fast track on the road to reorganisation, could therefore lead to negative impacts for the Treasury in terms of lower revenue.

The measure, on the other hand, ‘touches’ on the physical network on a specific aspect: the regulation of PVRs, or Sales and Recharge Points, authorised by online dealers for the opening and recharging of gaming accounts and which represent the territorial projection of the online offer and the main instrument of commercial promotion within the framework of the current advertising bans (‘Dignity Decree’). The government estimates that there are currently 50,000 active ISRs in the territory. In this regard, it must be acknowledged that having ‘circumscribed’ them to those subjects already included in the regulated gaming chain, if it goes in the direction of clearing the territory of the presence of realities where numerous cases of irregularity or illegality have been highlighted, on the other hand, it excludes a number of establishments open to the public that have been carrying out this activity for years, with an impact therefore on small businesses that used to draw income from it and that will find themselves at the mercy of the offer of foreign bookmakers (.com) to be absorbed into the illegal networks.

At the first meeting of the Unified Conference for the evaluations on the legislative decree scheme held on 25 January, the Regions, Autonomous Provinces and Local Authorities stressed the need for the Government to submit to the Conference the text of the measures on the reorganisation of the physical network before they are issued, in the wake of the experience of the Understanding signed in 2017, emphasising the need for their involvement in defining the general lines of the measures to be put in place to combat Gambling Disorder. Of particular interest is the proposal put forward by the Regions of their own co-participation, to the extent of 5%, starting from 2027, in the revenue from the tax on gaming machines, aimed at interventions to strengthen the prevention and treatment of gambling addictions and other social fragilities.

Another consideration made by the Regions, and which confirms the interconnection between the online and physical areas, and therefore the importance of a unified approach, is that relating to PVRs. The importance for the Regions of being able to access information on the locations of these points was underlined because, being qualified as ‘places in the physical gaming network’, knowledge of their location represents necessary information for defining the criteria for the territorial distribution and concentration of the physical gaming networks and for measures to combat addiction.

In consideration of what has been said, it is important for the Government to follow up on what is provided for in paragraph 2 of Article 1 of the draft law on online gaming: “The provisions relating to public games allowed in Italy collected through physical networks are contained in a subsequent legislative decree issued after the definition of a specific programmatic agreement in this regard between the State, Regions and Local Authorities”.

With regard to the offer of ‘physical’ gaming, the issues to be addressed and resolved are many: from the renewal of concessions, to overcome the provisional logic of extensions, to the creation of a definitive and stable framework of State levies, which for years have been the subject of continuous increases assumed in cash logic; from the establishment of a proper relationship between the State and the Regions in determining the dislocation of territorial offer, to the sharing of concrete, effective and really applicable actions, in the fight against Gambling Disorder.

Failure to address these problematic aspects would mean witnessing a deterioration of the ‘physical channel’ with negative effects on several levels, as recently illustrated in the context of the Table of Comparison promoted by Eurispes, which shone a spotlight on the specificities of the physical network of public gaming offerings and the positive functions performed by it.

First of all, the employment significance of the public gaming offer on the physical network should be highlighted: between 140,000 and 150,000 employees and FTEs (full-time equivalents). These numbers attest to the labour intensive dimension of a supply chain that, moreover, embodies 0.5% of the national GDP (about EUR 10 billion, with EUR 9.2 billion for the Treasury). In addition, while it is true that concessions are held by medium-sized and large companies, the supply chain also includes the small-medium companies of operators, which represent the link with the operators, and which in turn use outsourced services from external parties.

Finally, the operators operate around 85,000 outlets, including specialised and generalist outlets. The latter (about 50,000) still represent a capillary network. The current ‘numbers’ of the physical network have already been reduced between 2017 and 2022. If, in the reorganisation of the physical network offer, a further limitation of the sales outlets were to take place, the risk of a negative impact on employment would become a certainty. A marginalisation of the physical network of legal supply, moreover, would undermine the decisive role of guarding legality that it represents.

Another problematic aspect that the reorganisation should address is that of the so-called ‘federalism of gaming’. Eurispes has repeatedly pointed out in recent years that the policies adopted at the regional level to counter the risks of problem and/or pathological gaming, have produced patchy measures that, however, have been united by the adoption of tools such as the so-called ‘distance meter’ and the compression of hours. On the one hand, these instruments have turned out to be inapplicable, and thus the subject of continual moratoria; on the other hand, where even partially applied, they lead to the practical disappearance of a substantial part of the legal gaming offer.

This gives rise to serious problems for the overall resilience of the public gaming offer. Firstly, the marginalisation of the physical offer has a negative impact on employment levels, which are concentrated precisely on specialised and generalist outlets. In addition, it should be considered that the Treasury collects from the offer of certain products, AWP and VLT, a substantial part of the PREU: of the approximately 10.5 billion in 2023, more than 5.5 billion derive precisely from wagering through devices. From 2017 to 2023 this figure, by the way, has already dropped by 10 per cent: 5.5 versus 6.1 billion. If this trend were to deepen, the Treasury would be severely damaged, also because it is precisely on the machines that a higher levy is realised, while, for the same volume of gaming, online is subject to a much lower levy.

In conclusion, the hope is that all the parties deputed and interested in the regulation of the public gaming offer will take note of what is contained in the Draft Decree, with the aim of improving it and, above all, of reaching, as soon as possible, a real and comprehensive reorganisation that addresses the problems of the physical network in an organic manner.

In this inescapable process it is essential to listen as soon as possible to the voice of the Local Authorities, but also that of the operators, aware that time is not a ‘neutral’ element. Further delays would in fact deepen the trends that the market, as it is currently regulated, is now clearly manifesting, and that foreshadow a progressive marginalisation of the physical network.

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