The Italian retail betting sector consisting of 6,000 betting shops reopened this week, at the same time as a new harsher reality hit the industry in the form of the new 0.5% national betting tax.
The tax, which applies to all areas of the betting sector, is a temporary measure calculated on the basis of betting turnover. It is combined with the existing net betting duties imposed on retail, online and virtual betting, and will run until the end of 2021.
The tax is part of the Italian government’s Revival Decree which politicians hope will be able to raise €90 million to be given to the new ‘Fund for the Revitalisation of Sports’. The sports fund will be overseen by the Economic Ministry and has the aim of raising €40 million by the end of the year, with a further €50 million the target for 2021.
But the success of the fund will largely depend on the extent to which Italian betting operators, who have been devastated by the pandemic lockdown, can recover. The lockdown resulted in all bookmakers being closed from March 9, and sports betting revenue was further hit by a three-month postponement that affected all major sporting events in the country.
Industry sources estimate that sports betting turnover during this period dropped significantly, yet bookmakers reopening their facilities will now face a net tax increase of 15% this year, raising the overall level of betting duties from an aggregate of €270 million to €310 million.
But there has been some pushback from politicians, with a number of MPs stating that they were prepared to back amendments to reduce the tax. And the Revival Decree itself has yet to be formally ratified by the Italian Parliament, though time is running out for the opposition to amend the law.
Those pushing for a change to the tax proposals will be able to point to the statistics underlining the extent of the pandemic impact. One analyst has suggested that the suspension of sports events led to a loss of €20 million in sports betting revenues, while the combined retail and digital betting figures for March and April saw total sector revenue drop by 72% from February. And, according to the new Director-General of the ADM Customs and Monopolies Agency, Marcello Minenna, it will take at least a year for the industry to recover, a process that is likely to be slowed by the new taxes.