Italy Hikes Up Gambling Tax that Affects Major Operators

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The Italian government announced a tax hike of 2-5% for the gambling industry and this change was approved by the Senate on Sunday, the 23rd of December. The increase of taxes is likely to affect operators that are present in the market and result in the reduction of the revenue for giant networks and small casinos.

The law was voted on simultaneously with the amended budget for 2019 as the measure of filling an annual coffer with additional money. The government expects to receive approximately €770m, and the biggest part of this sum should come from the land-based industry.

The increase of the gambling tax came as a surprise for representatives of the gambling industry, especially those involved in the land-based sphere, as they were promised a milder raise. In total, the tax on revenue soar by a maximum of 5%. The exact figures are as follows:

• Online casino: from 20% to 25%;

• Sports betting faces an increase from 22% to 24%;

• Virtual betting is to pay a tax of 22%, instead of 20%;

• Land-based casinos are to deliver 20% in place of 18%.

The new law comes into effect on the 1st of January 2019.

The Outcome for Operators

It is already obvious that gambling operators will suffer certain damage, and Playtech is one of them. This major operator has recently expanded its presence on the Italian market, and the tax hike will cut its earnings by approximately €20-25m in 2019.

The immediate reaction by Playtech’s investors decreased the value of shares by 7% on Monday. Although the company’s shares showed 870p at the beginning of 2018, their price was as low as 357p on December 24th.

Source: “Italy’s gambling tax hikes to do damage to Playtech’s earnings”, published December 25th, 2018.