On Wednesday, following a week marked by missed deadlines and negotiations with Brussels, the cabinet of Prime Minister Giorgia Meloni approved a budget of approximately €26 billion ($29 billion). During her press conference, Meloni confirmed that the gambling sector would contribute €700 million to this budget, aligning with the Draft Budgetary Plan submitted to Brussels earlier in the month, which anticipates receipts of €718 million in both 2027 and 2028, and €478 million in 2029.
What remains unclear is the financial burden distribution. Meloni asserted that this was "not a budget against anyone," emphasizing that the government requested assistance from "those with fewer problems." However, leaders in the gambling industry might contest this viewpoint. The specific financial measures will only be clarified once the articles and technical reports related to the budget are released, leaving the industry to assess its prospects.
Retail operations seem to be the primary target for these budgetary funds. The licenses for Italy’s slot machines, betting shops, and bingo halls will expire on December 31. An effort that lasted three years to revise the operational areas for these venues failed to yield results last August due to a lack of agreement between the government and regional authorities. Without new tenders, the state will have to extend existing concessions and is likely to capitalize on this; these extensions currently generate approximately €232.76 million annually.
Lucas Zavarise, the government and regulatory affairs manager at Gaming Laboratories International, stated, "The final text will show how it’s raised," indicating that reports mainly point toward increasing costs for land-based retail operations through pricier concession extensions and possibly a one-point increase in the PREU, which is a levy on gaming machine stakes. Historically, the Treasury has relied heavily on the PREU as a source of revenue.
Quirino Mancini, a partner at WH Partners, a law firm, believes the revenue goal is achievable through increased PREU rates on land-based machines and higher concession extension fees; he argues that significant increases in online gambling taxes are less likely. Similarly, Stefano Sbordoni from Sbordoni & Partners warns that while extension fees on retail outlets appear inevitable, imposing higher taxes might devastate businesses that are already struggling.
Industry statistics support Sbordoni’s caution, revealing that slot revenue dipped by 5.7% in the second quarter, according to ADM, the regulatory body. The Court of Auditors also reported a decline of approximately €200 million in gambling tax receipts within the first eight months of the year. Additionally, Milano Finanza, a financial publication, noted that the anticipated revenue may also be sourced from the aggio—the commission lottery operators retain—and online gaming.
However, Giulio Coraggio, a partner at DLA Piper, remains skeptical about the feasibility of reaching the stated financial targets. He argues, “In my view, the target is not achievable, at least not in the way the government expects.” He points out that regardless of whether the funds come from increased PREU on AWPs and VLTs or from higher concession fees, operators will face reduced profit margins, ultimately leading to fewer bonuses and decreased player engagement, prompting some to turn to offshore sites that provide better conditions devoid of taxes.
Looking ahead, if retail operations are the favored method for raising funds, online platforms pose a significant concern. Just last year, 46 operators paid €7 million per license to join Italy's newly structured online market, a sharp rise compared to the previous fee. Mancini argues that although operators secured licenses based on a stable economic framework, any introduction of new charges could severely undermine the market's credibility.
Sbordoni echoes this, asserting that the stability of tax rates for online licensees, guaranteed by a primary law for the nine years of concession, is crucial. New levies could severely damage the government's credibility.
Compounding the issue is the fact that operators are currently adapting their systems to meet new technical standards set by ADM, with the deadline pushed to February 15, 2027. Zavarise warns that imposing financial stress during this transitional phase could be detrimental, especially as the ban on advertising restricts operators from mitigating these impacts through marketing.
Experts express concern that the primary victor in this situation may be the unlicensed operators. As Sbordoni notes, “The main risk is illegal gambling,” with Mancini pointing to the potential for channel displacement as more players shift to less regulated platforms. Coraggio highlights that rising costs could drive weaker retail outlets out of business, leaving gaps that illegal operators might fill.
ADM, Italy’s regulatory authority, has taken action against unauthorized gambling sites, blocking 44% more in 2025 than in the previous year. Zavarise acknowledges this progress but argues that blocking alone is insufficient. Coraggio emphasizes the importance of protecting the robust channelization rate Italy has achieved in the past 15 years, cautioning that this hard-earned position could erode swiftly under current pressures.
The autumn budget presented by Chancellor John Healey in the UK on the same day indicated a raise in machine games duty from 20% to 25% for higher stakes machines, sparing pubs and seaside arcades. This raises questions about whether gambling is increasingly being viewed as a revenue source for European governments. Zavarise affirms this perspective, noting similar tax hikes in the UK and the Netherlands, and a proposed 1% EU-wide levy on online gambling in the European Parliament, although consensus remains uncertain.
Coraggio points out the UK’s experience as a cautionary tale, highlighting a marked increase in wagers placed with illegal operators following nearly doubled remote gaming duties. While not all growth in illegal gambling can be attributed to tax changes, affordability checks and stake limits also play significant roles. Mancini speculates that gambling's growing allure to European governments reflects its acceptance as a potential source of extra tax revenues.
For Italian operators, this situation is still evolving. Unlike in the UK, Italian budget proposals are subject to parliamentary review and potential amendment. The Chamber of Deputies is expected to vote by mid-December, with the Senate following suit by year-end. Coraggio advises lawmakers to ensure that any financial contributions from the sector are coupled with credible strategies to combat illegal gambling, like payment blockage, ad removals from social media, and prompt retail tender launches. Otherwise, he cautions, Italy risks repeating the mistakes observed in the UK shortly after witnessing their initial outcomes.
