Tax adjustments to specific gambling segments have been incorporated into Italy’s 2025 Budget Law, signed off by President Sergio Mattarella on 9 January.

The provisions of the 2025 Budget Law have elicited both positive and negative reactions from Italian gambling stakeholders.

The Budget confirmed the decision by the Ministry of Finance (MEF) to extend existing concessions for online gambling licences for an additional tax year.

Additionally, concessions for land-based gambling venues, which were set to expire in December 2024, have been extended by a further two years as the government continues reorganising laws related to retail betting, horse racing, bingo, and gaming machines.

For online gambling, the extension will allow several operators to maintain their current status for an additional fiscal year before transitioning to a new licence regime. The new regime will impose a €7m authorisation fee and operating fees of 3%.

Italy’s new licence regime was launched on 19 December 2024, following its approval by the European Commission. Current licence holders must transition to the new regime by 30 May 2025, as required by ADM, Italy’s Customs and Monopolies Agency.

The new licence fee of €7m will be paid in two instalments: €4m upon award and €3m upon the commencement of operations, which must occur within six months of receiving ADM’s approval.

Italian operators had urged the MEF to provide a grace period for businesses transitioning to the new regime, arguing that the substantial €7m fee for online gambling licences would disproportionately affect small and mid-sized operators.

For land-based venues, the MEF extended existing concessions, anticipating the generation of over €19m in tax revenue from bingo, €74m from retail betting, and €140m from gaming machines. 

However, the positive developments were short-lived, as the Budget Law also announced revisions to tax adjustments on specific gambling verticals.

For the online segment, gross gaming revenue (GGR) tax rates for sports and virtual betting will increase from 24% to 24.5%. For online casino, bingo, and poker, GGR taxes will increase from 25% to 25.5%. The government expects to raise €481m new tax revenues in 2025, driven by these tax adjustments and the transition of online operators to the new regime.

For retail gambling, the sports betting tax rate increased from 20% to 20.5%, virtual games rose from 22% to 24.5%, while fixed-odds horse betting experienced a significant reduction, dropping from 43% to 20.5%. The changes to land-based activities are projected to generate an additional €39m annually.

The significant reduction in the fixed-odds horse betting tax rate – from 47% to 24.5% – was introduced to revitalise Italy’s struggling horse racing sector.

Criticism of the tax increases and rising operational costs was voiced by Logico, Italy’s online gambling trade body. The organisation warned that many operators might decline new concessions due to the €7 million fee and the additional tax burdens. Moreno Marasco, President of Logico, emphasised, “The risk is weakening a sector that is the only bulwark against illegal gambling.”

Conversely, foreign operators have welcomed the changes to the new online gambling regime, with Italy being seen as a growth market in an otherwise stagnant Western European landscape.

In 2024 Flutter Entertainment doubled down on its Italian growth strategy by acquiring Gruppo SNAI from Playtech for €2.3 billion. This deal expanded Flutter’s presence in Italy, allowing it to operate the brands Betfair, PokerStars, Sisal, and SNAI.

Elsewhere, Pontus Lindwall, CEO of Betsson AB, expressed confidence to analysts and SBC that Betsson would continue to gain market share in Italy’s casino and sportsbook markets.

Further ambitions were outlined by Evoke Plc, the parent company of 888, which reported a 30% increase in Italian income and highlighted Italy as a critical market for the firm’s strategic recovery.

Industry analysts are closely monitoring market reactions and developments, as Italy could become a new battleground for M&A activity in 2025.

Source