On Wednesday, after a week filled with delayed deadlines and negotiations with Brussels, Giorgia Meloni's Cabinet approved a budget estimated at around €26 billion ($29 billion).
During her press conference, the prime minister disclosed that €700 million would be sourced from gambling revenue. This figure aligns with the Draft Budgetary Plan submitted to Brussels earlier this month, projecting €718 million for both 2027 and 2028, and €478 million for 2029.
However, Meloni did not specify who would bear the cost. She emphasized that it was "not a budget against anyone," stating the government had merely asked "those with fewer problems to lend a hand." Leaders within the gambling industry may contest this description. The specific measures will only be clarified once the bill's articles and technical reports are released, leaving the industry to assess its odds in the meantime.
The high street is likely to be a significant contributor. Italy’s licenses for slot machines, betting shops, and bingo halls are set to expire on December 31. A three-year attempt to redefine operational locations for these venues ended in August without any agreement between Rome and the regions. Lacking new tenders, the state is expected to extend current concessions while bolstering its revenues from these extensions, which currently generate approximately €232.76 million annually.
Lucas Zavarise, government and regulatory affairs manager at Gaming Laboratories International, noted, "The final text will show how it’s raised," adding that reports primarily suggest the measures will affect land-based retail through increased concession costs and a potential rise of one percentage point in the Prelievo Erariale Unico (PREU) tax on slots and Video Lottery Terminals (VLTs), with only slight modifications anticipated for online gambling. The PREU, a tax on gaming machine stakes, has become a favored tool for the Treasury.
Quirino Mancini, a partner at WH Partners, views the revenue target as attainable. He predicts a mix of heightened PREU on land-based machines along with pricier concession extension fees, rather than substantial tax hikes on online gambling. His colleague, Stefano Sbordoni from Sbordoni & Partners, concurs that paid extensions seem inevitable but warns that increased taxes on retail establishments could jeopardize businesses that are already struggling.
Indeed, market data reveals troubling trends; slot revenue dropped by 5.7% in the second quarter, according to Italy's regulatory body, ADM. Additionally, the Court of Auditors reported a decline in gambling tax revenue of about €200 million during the first eight months of the year. Not every operator sees the high street as a source of funds; Milano Finanza, a financial newspaper, asserts that part of the revenue might instead originate from the aggio, the commission operators retain from lottery sales, and online gaming.
Giulio Coraggio, a partner at DLA Piper, expresses skepticism about the ability to meet revenue targets. He argues, "In my view, the target is not achievable, at least not in the way the government expects. Whether the revenue comes from increased PREU on slot machines and VLTs, more expensive concession extensions, or additional charges on online services, operators will face lower profit margins.
Lower profit margins lead to poorer odds and fewer bonuses for players, which can result in reduced participation or a shift to offshore platforms offering better terms and bypassing taxes in Italy," Coraggio concludes, cautioning that the government's target could shrink the market it seeks to tax.
If retail is the favored method for generating funds, online gambling is perceived as a potential risk. Just one year ago, 46 operators paid €7 million per license to join Italy's reformed online market—a drastic increase from the previous fee. Mancini acknowledges that while concession terms are set, new heavy fees could undermine the economic foundation that prompted operators to invest in the first place.
Sbordoni asserts that tax stability for online licensees is guaranteed for the nine-year concession period by primary law, warning that introducing a new taxation scheme could tarnish the state's credibility.
Amid system renovations to comply with ADM's new technical requirements, operators face further challenges. The regulatory body has extended the deadline to February 15, 2027. Zavarise points out that added financial burdens could strain operators during this transition. Additionally, due to Italy's ban on gambling advertising, operators lack effective measures to counterbalance an increase in operational costs.
Experts agree that the ultimate victor in these scenarios may be the unlicensed operators. Sbordoni warns of escalating illegal gambling risks, noting that increased prices may drive players toward unregulated platforms. Mancini echoes this concern, suggesting that illegal operators will gain from the pressure placed on legal channels. Coraggio observes that rising costs and PREU could push weaker retailers out of business, allowing illegal operators to fill the void.
Italy's gambling regulator is working proactively; Zavarise notes that ADM blocked 44% more unauthorized sites in 2025 compared to the prior year. However, he maintains that effective blocking is just one part of the solution. Coraggio emphasizes that Italy has established one of the highest market channelization rates in Europe over the past fifteen years, a hard-fought achievement that could quickly be lost.
This issue of gambling taxation is not unique to Italy; similar discussions arose in the UK on the same day. Chancellor John Healey announced an increase in machine games duty from 20% to 25% for higher stakes machines, while exempting pubs and seaside arcades.
As the situation suggests, gambling is increasingly viewed by European governments as a lucrative revenue source. Zavarise notes, "The UK and the Netherlands have raised tax rates, while a suggested 1% EU-wide levy on online gambling stirred discussions in the European Parliament, although achieving unanimous support may be challenging.
Coraggio refers to the UK’s experience, where remote gaming duty nearly doubled from 21% to 40% in April, highlighting a surge in stakes with illegal operators. He acknowledges that not all growth can be attributed to tax increases, noting that affordability checks and stake limits are also contributing factors.
For Italian operators, the process is far from over. Unlike in the UK, where budget measures typically see little change post-announcement, Mancini points out that Italy's proposals are subject to debate and potential amendments by Parliament. The Chamber of Deputies is slated to vote by mid-December, while the Senate aims to follow suit by the year's end.
Coraggio has recommendations for lawmakers: "If the sector is to contribute, the funds must coincide with a credible strategy against illegal operators. This includes blocking payments, eliminating social media ads, and finally advancing the retail tender process. Failing to implement these measures means Italy risks replicating the UK’s mistakes soon after witnessing their outcomes."
