The long-awaited Italian Ministry of Economy and Finance’s decree, enhancing the fixed-odds betting regulation to international standards, has finally been published in the Official Journal and will now enter into force on October 28, 2022.
The new Ministerial decree regulates fixed-odds betting on sporting and non-sporting events — excluding, however, horse racing — providing for these products’ regulation improvements.
To put things into context, the betting-regulation reform originated back in 2017 following an extensive consultancy process among the Italian gambling regulator (ADM) and both ground-based and online-betting trade associations and licensees.
Such operator/regulator joint cooperation, which allowed the draft reform to benefit from multi-knowledge sharing, was welcomed by the Italian Council of State, when releasing its preliminary positive advice on the draft decree in January 2018. While this cooperation should be the strongest pillar for a successful regulation, it has unfortunately stopped since then, thus this fixed-odds betting regulation remains a unique example of enhanced cooperation. The entry into force of this decree was even frozen until 2022, presumably by reason of a political context averse to gambling and which originated later on the gambling-advertising ban.
As regards the improvements brought by this new decree, these are significant in terms of alignment with the products’ management with international standards, to the benefit of the players and the licensed industry, as well as to the Italian State.
Just to mention the most noteworthy ones, it should be noted that, first of all, licensees will be able to lower the minimum stake and increase the maximum winning amount for single and Acca bet. With the minimum stake at €1 (instead of €2), a player will now be able to spend less when betting. In turn, the potential winnings are increased from €10,000 to €50,000.
The decree also introduces the cashout facility in betting. The player will thus finally have the possibility to exit the bet before the outcome, allowing him to avoid the risk, giving up part of the winnings.
Besides, licensees will be able to offer Asian handicap and draw-no-bet facilities and to introduce the odds’ third decimal number. This improvement is particularly relevant, as it might facilitate those multi-licenced betting operators that may finally apply the same traders’ logic across all jurisdictions.
Without a doubt, this alignment with international standards will allow betting licensees to better compete with the current illegal offer and boost the last online-betting tenderers that entered into the market while the advertising ban covering gambling entered into force.
The decree confirms the tax rate already applicable to both ground-based (22% GGR) and online betting (24% GGR) since January 2019.
Still, some relevant regulations’ improvements will have to wait for their implementation provisions to be issued by the ADM.
This is the case, for example, with the free-bets introduction, where the bookmaker will be allowed to deduct the (free) stake from the return to the player. Until now, free bets were not allowed into the Italian market, with ADM threatening to sanction licensees that attempted to offer them. Yet the new betting decree demands the free bets functionality to be covered by an ADM implementation provision on bonuses in betting.
The correction of an odds’ error (due, for example, to the omission of the point that identifies the decimals in the odds) by a licensee also requires an implementation provision to be issued by the ADM.
Up to now, the position of the ADM was that bookmakers had to accept wagers, even in the event of an error in the odds, and potentially pay higher winnings based on incorrect odds as part of their entrepreneurial risk. Instead, some Court rulings established that if such errors can be considered as evident/gross in the betting agreement under the Italian Civil Code provisions, the relevant bets must be voided.
With the new betting decree, the licensee will not be able to correct autonomously any wrong odds, but will have to undergo a previous acknowledgement and authorisation process before the ADM. Criteria and methods for identifying the wrong odds and the corrected ones will be established by ADM with a following implementation provision.
The challenge now lies ahead in these implementation provisions. Hopefully, the regulator will confirm its use of the stakeholders’ consultation process, to the benefit of all.