On Wednesday, following a week marked by missed deadlines and negotiations with Brussels, Italy's Prime Minister Giorgia Meloni announced that her cabinet had approved a budget totaling around €26 billion ($29 billion). In her press conference, Meloni disclosed that €700 million of this budget would be sourced from the gambling sector, aligning with the Draft Budgetary Plan submitted to Brussels earlier in the month. This plan projects revenues from gambling at €718 million for both 2027 and 2028 and €478 million in 2029.
However, the Prime Minister did not specify who would bear this financial burden. "This is not a budget against anyone," she stated, emphasizing the expectation that "those with fewer problems lend a hand." This assertion is likely to be contested by leaders in the gambling industry. The specific measures related to these funding sources will be clarified only once the detailed articles and technical reports are released, leaving the industry to assess the potential impact on their bottom line.
The brunt of these new financial requirements may fall on land-based establishments. With the licenses for slot machines, betting shops, and bingo halls set to expire on December 31, Italy has found itself needing to extend current concessions due to the failure of a three-year plan to regulate these operations. This extension is expected to generate approximately €232.76 million annually.
Lucas Zavarise, a regulatory affairs manager at Gaming Laboratories International, noted that the government is likely to implement more expensive concession renewals and potentially raise the PREU tax on gaming machines by one percentage point. This PREU tax, which taxes stakes on gaming machines, has often been the government’s primary method of securing revenue from the gambling sector.
Quirino Mancini, a partner at WH Partners, believes the revenue target is attainable, seeing it as a mix of higher PREU taxes on land-based machines and elevated fees for concession extensions. However, he warned that increasing taxes on retail operations could seriously jeopardize businesses already in decline. Indeed, slot revenues dropped by 5.7% in the second quarter, and the Court of Auditors has reported a decrease in gambling tax revenues of approximately €200 million during the first eight months of the year.
In contrast, other reports suggest that revenue may derive from the commission operators earn from lottery sales and online gaming. Giulio Coraggio, a partner at DLA Piper, expressed skepticism about the viability of reaching the revenue goal, stating, "The target is not achievable, at least not in the way the government expects," and warning that increasing costs will reduce margins for operators. This could push players towards illegal platforms offering better odds and bonuses, impacting the overall market size.
While the high street may be the immediate focus, online gambling poses significant risks too. Just last year, operators paid €7 million per license to enter Italy's revised online market, which was 35 times the original fee. Mancini noted that while changes to concession terms do not necessarily equate to higher taxes, imposing substantial new fees could severely impact the investment framework that operators rely on. The integrity of Italy’s licensing system could be at stake.
Legal experts are also concerned about the implications of any tax changes on the credibility of the Italian gambling market. Sbordoni pointed out that tax stability is crucial for online licensees, warning that introducing new levies would tarnish the state’s reputation. Operators, meanwhile, are in the process of adapting to new regulatory requirements, a task so intricate that the deadline has now been extended to February 15, 2027. This additional financial burden could overwhelm operators during an already challenging transition period.
Experts agree that the primary beneficiaries of any aggressive taxation measures are likely to be unlicensed operators. Sbordoni remarked that the main drawback is the potential rise in illegal gambling activity, while Mancini warned of inevitable channel displacement, which could drive players back to unregulated entities. Zavarise remarked on the significance of preventing illegal operations, as ADM’s data showed a 44% increase in blocked unauthorized sites in 2025 compared to the previous year.
The gambling landscape appears to be complicating further in Europe. On the same day that Italy announced its budget, Chancellor John Healey in the UK raised the machine games duty from 20% to 25% for high-stakes machines, while exempting smaller establishments like pubs.
This trend raises questions about whether gambling has become a convenient cash cow for European governments. Zavarise indicated that this is increasingly the case, citing both the UK and the Netherlands as examples of rising tax burdens within the sector. The European Parliament is also reportedly considering a 1% EU-wide levy on online gambling, although reaching unanimous approval is uncertain.
Italy's situation is further complicated by the need for parliamentary approval of budget measures. Unlike in the UK, where budget proposals are seldom altered after announcement, these measures must be debated and potentially amended by the Chamber of Deputies and the Senate before year’s end.
Coraggio cautioned lawmakers that if they insist on taxing the sector, they should simultaneously enact a credible plan to combat illicit operators, which includes strategies for blocking payments and advertising. Without such measures, he assessing that Italy risks repeating mistakes observed in the UK, where significant tax increases resulted in growing illegal gambling activity alongside legitimate operations.
