On Wednesday, Giorgia Meloni's Cabinet approved a budget nearing €26 billion ($29 billion) after a period of drawn-out negotiations with Brussels. During her press conference, Meloni revealed that €700 million will be sourced from gambling, which aligns with the Draft Budgetary Plan previously submitted to Brussels, proposing €718 million for both 2027 and 2028, and €478 million for 2029.
However, Meloni did not specify who would bear the burden of this contribution, asserting that the budget isn't directed "against anyone" but asking "those with fewer problems to lend a hand." This statement may be challenged by gambling executives, as the exact methods for raising these funds will only be disclosed following the release of the bill's articles and technical reports. Until then, the industry is calculating its odds.
The primary source of revenue appears to be the high street. Existing licenses for slot machines, betting shops, and bingo halls are set to expire on December 31. An attempt to reshape where these venues can operate faltered in August, leaving the state with no option but to extend current concessions, which generate approximately €232.76 million per year.
Lucas Zavarise, regulatory affairs manager at Gaming Laboratories International, indicated that the revenue would likely stem from a more expensive concession extension and a potential increase in the one-point PREU on slots and video lottery terminals (VLTs), with minimal adjustments expected for online gambling. The PREU, a tax on gaming machine stakes, has historically been a favored tool for the Treasury.
Quirino Mancini, a partner at WH Partners, suggested that reaching this target is feasible, predicting a combination of heightened PREU on land-based machines and costlier concession fees rather than a significant increase in online gambling taxes. Stefano Sbordoni from Sbordoni & Partners expressed concern that raising taxes on physical shops could further harm an already struggling business.
The data supports Sbordoni's worry, as slot revenue fell by 5.7% in the second quarter, according to ADM, the regulatory authority. The Court of Auditors reported a drop of about €200 million in gambling tax receipts in the first eight months of the year. Milano Finanza, a financial daily, mentioned that revenue may also arise from the aggio, the commission retained by operators from lottery sales, and online gaming.
Giulio Coraggio from DLA Piper shared his skepticism, questioning the viability of these revenue targets. He stated, "I believe the target is not achievable as the government anticipates. Whether it's through an increased PREU, expensive concession extensions, or new charges for online gambling, operators will face reduced margins.
Lower margins signify worse odds and fewer bonuses, leading players to seek offshore options that offer better conditions without the tax burden in Italy," he warned. Coraggio emphasized that the government is setting a target that could diminish the market.
If retail is the favored option, online gambling is considered the uncertain factor that poses the greatest concern among legal experts. Just last year, 46 operators paid €7 million each for licenses to enter Italy’s restructured online market, a fee that was 35 times higher than previous costs. Mancini noted that operators based their applications on an established economic framework at the time of investment.
He acknowledged that changes to concession terms don’t necessarily freeze tax rates, but emphasized that imposing heavy new charges could undermine the foundational assumptions of their investments, seriously harming the credibility of Italy's licensing system.
Sbordoni believes that the current taxation stability for online operators is protected by a primary law that spans the nine-year concession period. He cautioned that new taxes would damage the state’s credibility as well.
Additionally, there is a pressing practical concern. Operators are currently upgrading their systems to comply with ADM's updated technical regulations, a process complicated enough to warrant a deadline extension until February 15, 2027. Zavarise highlighted that placing additional financial pressure on operators during this critical transition could be detrimental, especially since Italy's prohibition on gambling advertisements limits marketing options to recover from higher costs.
Experts agreed that unlicensed operators might emerge as the unwelcome beneficiary of these developments. Sbordoni pointed to the rising threat of illegal gambling, while Mancini warned that intensified regulations could push customers toward unlicensed providers. Coraggio predicted that increased costs would ultimately harm weaker retail outlets, leading to blocks created by illegal operators in areas where legitimate businesses fail.
The ADM has been proactive; it blocked 44% more unauthorized sites in 2025 compared to the previous year. However, Zavarise noted that while blocking is useful, it cannot address all the challenges. Coraggio stressed that Italy has spent 15 years fostering one of the highest channelization rates in Europe, which could vanish just as quickly.
In Britain, Chancellor John Healey announced an adjustment to the Autumn Budget on the same day, raising machine games duty from 20% to 25% for higher-stakes machines while exempting pubs and seaside arcades. This raises the question of whether gambling is becoming Europe’s financial fallback. Zavarise indicated that this is increasingly the case, with higher rates being adopted in the UK and the Netherlands, and discussions underway for a proposed 1% EU-wide levy on online gambling, although gaining unanimous agreement remains unlikely.
Coraggio pointed out that the UK significantly raised remote gaming duty from 21% to 40% earlier this year, contributing to a notable rise in bets placed with illegal operators. While he acknowledged that factors beyond taxation, such as affordability checks, play a role, he maintained a clear trend is emerging.
Mancini, on the other hand, suggested that governments view gambling as a politically viable avenue for revenue generation, knowing few constituents advocate for slot machines.
For Italian operators, this game isn’t over yet. Unlike in Britain, where budget measures tend to remain stable once introduced, Mancini observed that Italy’s proposals must now pass through review, discussion, and potential amendments within Parliament, with the Chamber of Deputies expected to vote by mid-December and the Senate by year’s end.
Coraggio advised lawmakers that if the gambling sector is to contribute, it should be coupled with a credible framework to combat illegal operators, including blocking payment processes, prohibiting advertisements on social media, and initiating the retail tender process. Without these steps, he warned, Italy may replicate the UK’s missteps after witnessing the initial consequences firsthand.
