Tottenham Report: Italian regulator losing legal battles against remote gambling operators

November 16, 2021 3:00 AM
  • Valérie Peano
November 16, 2021 3:00 AM
  • Valérie Peano

These are definitely hard times for Italy’s Customs and Monopolies Agency (ADM), the gambling regulator. In recent past, the Administrative Court of Lazio has published a number of rulings, all in favour of the remote gambling licensees’ appeals, challenging the ADM’s position.  

The first legal battle worth mentioning is the one that confirmed an extension of remote gambling licenses until 31 December 2022.  

Beginning last winter, ADM sent out disconnection notices to those remote gambling licensees that, directly or indirectly, obtained their licenses via the tender procedure provided by Law no. 88/2009 and did not participate in the last remote gambling tender published in 2018. These disconnection notices warned of the immediate interruption of their operations due to the expiration of their licenses.   

The notices were sent to more than 20 licensees. All disputed the ADM decision before the Administrative Court of Lazio, requesting its voidance by reason of Article 1, Para. 935 Law 208/2015, which provided for an extension of all remote gambling licenses to 31 December 2022, pending the new tender procedure and in order to re-align the market framework.   

The Administrative Court rulings accepted all those claims and voiding the ADM notices, recognizing the realignment of the licenses’ expiration date.   

In particular, according to the Court, lawmakers had provided for the realignment of all the remote gambling licenses with the extension to December 2022, so as to ensure the continuity of national tax revenue and to protect customers against illegal gambling. ADM should have taken into account the lawmakers’ position, abiding by expiration date in December 2022.    

Interestingly, the Court further clarified that the law’s provision was clear enough and compliant with constitutional principles, rendering it unnecessary to escalate the case to the Constitutional Court.  

The second legal battle worthy of notice is the one that confirmed licensees’ claims that voided — for the second time — another ADM notice on additional taxation and calculation criteria for betting exchange. In this case, the Court declared the ADM’s position illogical and even ordered the regulator to pay legal costs to the claimants.  

Back in April 2021, the Administrative Court of Rome had already accepted the appeal of Betfair (Betfair Italia s.r.l.), voiding the ADM’s original notice about an added tax for betting exchange, the so-called “Save Sport Fund.”  

This additional tax was introduced by the national lawmaker during the first COVID-19 emergency period in Italy for 2020 and 2021, to support sports that were heavily impacted by the pandemic.  

However, the implementation notice issued by the ADM identifying the additional tax calculation was successfully challenged by Betfair; according to the Court, the regulator failed to provide sufficient evidence to explain its calculation criteria for betting exchange. This time around, the Court once again invited the ADM to accomplish this task, in favor of transparency, fairness, and proportionality principles.    

There is an undeniably significant increase in legal claims being brought against the regulatorOther legal battles have already been announced  

One of these may refer to the controversial national tender for remote gambling should it be published according to the conditions set forth by Italy’s Budget Law for 2019. These conditions aim to more than halve the number of remote gambling licenses to 40 from the current 90 licensees, with a minimum bidding price of €2.5 million for a nine-year license. Notably, in the previously mentioned tender of 2018, the number of awarded licenses for remote gambling was capped at 120 and the price for the license was €200,000 for a four-year license.  

Any tender publication for gambling is subject by law to the previous advice from the Administrative Supreme Court to the Regulator ADM. But in this case, it might not be worth the risk of receiving a negative opinion.  

What all of the above clearly state is that it is time for the Italian gambling regulator to take an ‘in-depth market assessment’, not only through stakeholders’ consultation, but also through international gambling regulatory benchmarking. This should allow any reform to ensure the continuity in the national tax revenue, as well as consumer protection against illegal gambling. 

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