Maximum possible profit tax planned
In order to increase its deficit budget, Italy is planning to increase taxes on gambling winnings. A proposal submitted by the incumbent 5 Star Movement at the beginning of October envisages a graduated tax model, according to which the highest possible tax rate of 23 percent could be due on larger winnings such as lottery jackpots in the future. Lottery winnings in Italy are currently only taxed at 12 percent; winnings under £ 300are currently considered tax-free.
The government's plan is currently being criticized by the Italian Telecommunications Office (Autoritá garante delle comunicazioni). The authority points out that the annual turnover of the Italian gaming sector is now around 100 billion euros. At the same time, Italian gambling customers only spend around 20 billion euros on gambling. The difference is mainly due to the fact that many customers reinstate their winnings immediately instead of withholding them. The customers' goal is therefore even greater profits.
At this point, the authority sees a problem with the planned tax increase, because if profits were reduced by higher taxes, customers could increasingly decide to withhold lower profits instead of reinstating them. In the future, profits of £ 100will be subject to a tax of 15 percent. Opposite Italian media Therefore, according to the authority:
“We are tired of the incompetence that seems to be a basic qualification to hold public office these days.”
The government, however, sees the increases as an opportunity to raise over 150 million euros annually. According to government spokespersons, the top tax rate of 23 percent would even bring 2.5 billion euros into the coffers. In this sense, Italian lottery winners from the past can be happy that the new tax regulation has not yet come into force.
Increase in sales tax
The Italian government has also announced an increase in sales taxes for operators of lottery terminals and SpielautomatenIGT. The taxation of lottery terminals should therefore increase from 7.9 percent to 9 percent, while at the same time a new rate of 23 percent instead of 21.6 percent should apply to slot machines . There are currently 11 operators authorizedigt to offer one or both of the affected categories.
According to Giulio Coraggio of GamingTechLaw, this step was also taken to adapt the country's budget to European requirements. Given Italy's high national debt, it is almost certain that taxes will increase. Meanwhile, the budget's deficit is over 130 percent of economic output. In this context, Coraggio emphasized that a total of around 150,000 jobs could be at risk from the effects of the tax increase. The wording continued:
"Unfortunately, the Italian government is looking for money to finance the country's budget in accordance with the parameters required by the European Commission. It is therefore unlikely that they will take into account the long-term negative effects of such a tax increaseigt."
The country of Italy recently submitted its new draft budget to the European Commission for approval. Accordingly, the tax increases will be accompanied by new measures that are intended to make it easier to investigate potentially illegal providers. At the same time, efforts to prevent tax evasion should be intensified. This will result in operators being required to register on an official anti-money laundering register.
Prohibition of cash payment for gambling services
Apart from the planned tax increases, there is also a risk of a ban on cash payments in relation to gambling services in Italy. As Deputy Economy Minister Laura Castelli (5 Star Movement) explains, the government's “virtuous struggle” should continue to “go forward, not backward”. For this reason, players will in future be required to only use credit or debit cards to invest in land-based gambling services. This would even affect scratch cards, which can currently be purchased in many stores for just a few euros.
Giorgio Pastorino, President of the Italian Gambling Industry Association, doubts that the plans will be implemented. The industry spokesman argued that players would not want to pay with a card for small amounts.
Gambling providers under pressure
The Italian government's new plans are putting local gaming providers under pressure. Italy already has one of the strictest gambling laws in Europe. A general ban on gambling advertising has also been in effect since the beginning of the year. The regulation was issued by Economy Minister Luigi Di Maio as part of the so-called “Decree of Dignity”. It is obvious that the strict ban is not well received within the European industry. Recently, the ban was also criticized by the Italian communications supervisory authority AGCOM. Further developments remain to be seen for the time being.
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