Italy Amends Online Poker Tax Structure and Gambling Advertisement Laws

December 19th, 2015 | by Brian Corlisse

Italy online gambling taxes Federico Butteroni

Federico Butteroni will have to pay more taxes the next time he wins an online poker tournament in Italy after the country released new changes to its Internet gambling tax arrangement. (Image: italiapokerclub.com)

Italy is amending its 2015 Stability Law that was introduced in October in order to more properly profit from online gambling, Internet poker, and sports betting.

Last June, the Italian government voted to eradicate Article 14 of its “Delega Fiscale” decree, legislation that dealt with gambling oversight and taxation.

That led to loss revenues for Rome, lawmakers from the country’s Budget Committee now revisiting the market and reintroducing elements to the Stability Law in order to recoup those evaporated proceeds.

Beginning January 1, gross online poker tournaments and cash game revenues will be taxed at 20 percent.

Sports betting will be hit with a 22 percent online tariff, while wagers placed in brick-and-mortar retail shops will be taxed at 18 percent.

Taxes on amusements with prizes (AWP) will also increase to 17.5 percent, pinball tournaments one example of that classification. In a small bit of good news for operators, the minimum payout for video lottery terminals is being lowered to 70 percent.

Value Not-So Added

Amending the Stability Law to profit off online gambling is a concerted effort among Italian authorities to generate revenues for the country without placing additional taxes and hardships on its residents.

The Value Added Tax (VAT) is a general tax across the European Union (EU) that places fares on basically anything bought and sold for consumption. It’s more or less applied on all goods and pertains to “commercial activities involving the production and distribution of goods and the provision of services.”

VAT’s goal is to create a neutral and transparent single market in Europe, but it comes at a cost.

VAT law mandates that the rate must be at least 15 percent. Similar to the local sales tax in the United States that is collected by 45 of the 50 states, VAT is a full five percent greater than the highest sales tax in America, Tennessee at 9.45 percent.

The tax revisions still need to be approved by the Chamber of Deputies when the committee meets this week. Should Chamber members rule in favor of the adjustments, which they’re expected to, the new tax laws will kick in on the first day of the New Year.

Advertisements Restructured

Changes to the Stability Law also address gambling advertisements and how the industry is marketed on television to Italy’s nearly 60 million citizens.

Commercials for gaming enterprises will be banned moving forward between the hours of 7 AM and 10 PM in order to prevent minors from being influenced by the marketing strategies.

The EU mandates that gambling advertisements be permitted in order to promote the regulated and legal industry in order to direct citizens looking to gamble online to controlled sites instead of offshore rogue networks.

Italy’s desire to block ads at certain times walked a fine line with EU law, but Italian Deputy Dorina Bianchi said the restrictions being implemented represent a “balanced choice” and will aid players in identifying legal from illegal websites.