On Wednesday, after a series of negotiations and missed deadlines with Brussels, Giorgia Meloni’s Cabinet approved a budget totaling approximately €26 billion ($29 billion). During a subsequent press conference, the Prime Minister disclosed that €700 million would be generated from gambling taxes. This figure aligns with the Draft Budgetary Plan that Italy submitted to Brussels earlier this month, projecting revenues of €718 million for both 2027 and 2028, followed by €478 million in 2029.
Meloni did not clarify who would bear this tax increase. She asserted that the budget is “not against anyone,” explaining that the government simply asked “those with fewer problems to lend a hand.” However, gambling industry stakeholders may disagree with this characterization. Details on the specific measures will become available once the full bill and accompanying technical reports are released, leaving the industry to evaluate its prospects amidst uncertainty.
The high street is likely to be the biggest contributor. Italy's licenses for slot machines, betting shops, and bingo halls are set to expire on December 31. A three-year push to redesign the locations of such venues fell apart in August due to a lack of consensus between Rome and regional governments. Without new tenders, existing concessions will need to be extended, and the state has learned to profit from this situation. Currently, the extension generates approximately €232.76 million annually.
Lucas Zavarise, the government and regulatory affairs manager at Gaming Laboratories International, noted that reports largely suggest reliance on physical retail establishments for these funds through more expensive concession extensions and a potential one-point hike in PREU (the gaming machine tax), with minor adjustments anticipated for online gambling. PREU is a tax imposed on gaming machine stakes and has historically been a primary fiscal tool for the Treasury.
Quirino Mancini, a partner at WH Partners, is optimistic about achieving the budget target through a mix of increased PREU on land-based machines and higher concession fees, rather than significant upticks in online gambling taxes. Stefano Sbordoni from Sbordoni & Partners echoed Mancini’s outlook, indicating that fee adjustments for concessions appear inevitable. However, he cautioned that raising taxes on retail gambling could further harm an already struggling sector.
Supporting this concern, ADM reports that slot machine revenues decreased by 5.7% in the second quarter, and the Court of Auditors projected a drop of around €200 million in gambling tax revenues over the first eight months of the year. Interestingly, Milano Finanza reported alternative prospects for revenue collection, citing potential income from the aggio (the commission operators retain from lottery sales) and online gaming.
Giulio Coraggio, a partner at DLA Piper, expressed skepticism over whether the anticipated funds would materialize. He cautioned that regardless of the source—whether higher PREU on low-stake slots (AWPs), increased concession fees, or new online charges—the result would be reduced operator profit margins. He asked whether the funds could really be gathered from a diminishing market, as tighter costs lead to worse player odds and incentivize them to seek out unregulated options.
As for the online sector, while physically-based gambling is the likely front-runner for revenue, it could face serious threats if new costs emerge. Just a year ago, operators had to pay €7 million each for a license in Italy’s revamped online landscape—35 times the previous fee. Mancini noted that operators had entered the online gambling market under a stable economic framework, implying that new financial burdens could damage their foundational assumptions.
He warned of the severe implications of introducing additional taxes, which would undermine the integrity of Italy's licensing system. Sbordoni emphasized that existing law guarantees tax stability for online operators during their nine-year licenses.
There are practical ramifications as well, with operators currently modifying their systems to comply with ADM’s revised technical standards. Due to the complexity of these modifications, the regulator extended the deadline to February 15, 2027. Additional costs at this delicate juncture could strain operators significantly, especially since Italian law prohibits gambling advertising, limiting their ability to alleviate financial pressures.
Industry experts express a collective concern that unlicensed operators are poised to be the primary beneficiaries of such developments. Mancini identified illegal gambling as a major risk; Sbordoni echoed this, warning of the potential for players to flock to unregulated alternatives. Coraggio noted that increased licensing fees and a higher PREU could lead to the closure of weaker retail establishments, leaving gaps often filled by illegitimate businesses.
Italy’s regulator, ADM, has proactively blocked an increased number of unauthorized websites, reporting a 44% rise in such actions during 2025 compared to the previous year. Nonetheless, Zavarise stressed that blocking sites is merely one aspect of addressing illegal gambling, pointing to the importance of maintaining Italy's hard-earned high channelization rates, which have developed over the previous fifteen years.
The gambling tax landscape is not exclusive to Italy. On the same Wednesday, the UK Chancellor John Healey announced an increase in machine games duty from 20% to 25% on higher-stakes machines while exempting pubs and seaside arcades.
Zavarise remarked that gambling seems to be increasingly viewed across Europe as a convenient source for additional tax revenue. Currently, discussions in the European Parliament are considering a 1% EU-wide levy on online gambling, although achieving unanimous agreement appears unlikely.
Coraggio referred to the UK's recent tax hikes as a cautionary tale, noting that the significant increase in stake levels placed with illegal operators coincided with substantial tax hikes, although not all rises can be attributed solely to taxation. Mancini offered a more cynical perspective, suggesting that many governments are gravitating toward gambling as a politically favorable revenue source, with few voices advocating for the industry.
For operators in Italy, the situation continues to evolve. Unlike in the UK, where budget announcements typically remain unchanged, Mancini highlighted that Italy's proposals will undergo review and possible amendment in Parliament, with the Chamber of Deputies slated to vote by mid-December and the Senate by year-end.
Coraggio advised lawmakers to approach the matter thoughtfully, suggesting that if the gambling sector is to increase its contributions, it should be accompanied by a concentrated effort to combat illegal operations, including blocking payments and advertising on social media, while also launching retail tenders. Failing to do so would risk Italy mirroring the mistakes of the UK shortly after observing their outcomes.
