Italy's land-based gambling reform is currently stalled in a political deadlock, prompting industry leaders to express concern about judges rather than elected officials shaping the framework at the recent SBC Summit in Lisbon. Quirino Mancini, co-founder and executive committee member of the International Masters of Gaming Law (IMGL), spoke on the panel titled “Beyond the Reform: The New Italian Gaming Landscape” on September 30. He emphasized that he does not foresee any governmental efforts to reorganize the retail gambling network before Italy's next general election, asserting, "I would struggle to imagine that, in the year before elections, any government, no matter the colour, would seriously address the reorganisation. Gambling is a very sensitive issue, and that is the reason why, in my view, we are where we are."
The implications of this deadlock are significant, given that retail gambling represents roughly three-quarters of Italy's gambling market, valued at over €21 billion. While the online gambling sector is undergoing a comprehensive overhaul with new regulations set to take effect on November 13, land-based reforms remain uninitiated. Mancini pointed out that discussions about reorganizing the gambling network have been ongoing since the 2016 Stability Law, a decade ago, noting that while the technical framework is largely settled—where the central government dictates parameters such as network size and distance from sensitive areas—implementation is a matter for regional and municipal authorities.
"The issue stands in political terms much more than in organisational, logistic or regulatory terms," he stated.
The discussion at the summit arrived alongside a recent ruling from the Council of State regarding Italy’s top-up outlets, known as PVRs, where players can deposit cash into online gaming accounts. The court reaffirmed the €100 weekly cap on cash and non-traceable top-ups that has been in place since May, while also upholding a ban on withdrawals at PVRs. However, it deemed the total prohibition of internet-connected devices in these shops as disproportionate. In response to the rulings, Mancini remarked, "Wherever there is a vacuum in the legislative power, the judicial one steps in, and that becomes the regulation, which is never a good thing. With all due respect to the magistrates, most of the time they do not know exactly how our industry works."
The uncertainty created by this situation poses daily challenges for operators managing both online and retail businesses. Davide Diodato, CEO of Novomatic-owned HBG Online, highlighted the disparity between the nine-year timeline for online licences versus the annual extensions for retail concessions, stating, "You don’t fly aircraft with two flight plans and different information. But it’s actually what we have to do every day. So it’s pretty tough."
The burden of confusion particularly affects small retail operators. Diodato noted that their ongoing concerns consist of inquiries regarding future developments, making it difficult for them to invest or expand. Sisal's managing director, Marco Tiso, criticized the retail regulations as outdated, stating they were created nearly 20 years ago, resulting in inconsistencies in product offerings and promotions based on sales venue.
On the digital side, Microgame CEO Marco Castaldo described the current regulatory environment in Italy as "hyper-regulation," with an intricate complexity that might soon be seen in other regulated markets. He commented on the ongoing trend of market consolidation, revealing that the top five operators currently account for 85% of market Gross Gaming Revenue (GGR), a figure that is projected to increase.
Fabio Bufalini, country director for Stake Italy, pointed out the inequity faced by licensed operators who are restricted from advertising bonuses while unregulated sites enjoy unfettered access to promotion via social media, describing this as an instance of "unfair competition."
Despite the struggles in the retail sector, panellists expressed optimism about the online market's potential growth. There remains a solid opportunity for retail to evolve rather than diminish. Castaldo noted that there will always be value in face-to-face interactions for players, with the challenge for each operator being how best to integrate digital elements into the overall customer experience. Tiso echoed this perspective, suggesting that retail spaces could transition from simple points of sale to hubs for assistance and social interaction.
A potential shift in player engagement was also suggested by Tiso, who envisioned a scenario where the flow of customers might reverse, with online platforms directing traffic back to retail establishments. Meanwhile, Diodato pointed out the changing dynamics of player demographics, suggesting that for younger generations, initial contact with gambling is likely through online channels rather than physical stores. Even Bufalini recognized the complementarity between online and retail sectors, advocating for a holistic approach from both the industry and regulators. Diodato concluded by emphasizing that while the illegal market can replicate many aspects of their offerings, they cannot replicate the community ties cultivated by retail operations.
