The Italian government notified the European Commission, on 28 December, of its draft decree which sets criteria that operators must meet in order to offer online gambling services in Italy.
On 28 December 2007, the draft Decree laying down compulsory requirements for the operation and collection of revenue from remote gambling and related procedures, has been notified to the European Commission pursuant to EC Directives 98/34/EC and 98/48/EC, which impose an obligation upon each Member State to notify to the European Commission (and to each other) all the draft technical regulations concerning products and Information Society services before they are adopted at a national level.
This draft has been established in order to regulate the provision of remote gambling activities currently granted to one or to more entities as licensees (concessionaires), and to transpose the principles of the EC Treaty with particular reference to freedom of establishment and freedom to provide services within the internal market.
Background framework on remote gambling
In Italy, gambling activities are managed and run by the State. In 2002, the Ministry of Economy and Finance assigned all such operations to the independent State monopolies administrator, Amministrazione Autonoma dei Monopoli di Stato (AAMS)1, which operates gambling activities both directly and by transferring such rights to other bodies, granting them permits or concessions that give them the right to run these operations in the public interest or on behalf of the State.
Since 2001, the development of new technologies and delivery channels for gambling, such as the internet and other interactive media, has led the Italian regulator to take, on one hand, a number of measures to cover remote gambling by updating the regulatory framework and the offer of the games, and on the other hand, to combat illegal or unauthorised forms of gambling.
Concerning the provision of the remote gambling services, the Bersani Decree2 reorganised the way offline and online gambling on sports and horse racing is run, providing for new tender procedures. Consequently, AAMS published two calls for tender to grant new concessions for sports and horse race betting to any (Italian or foreign) operators that were suitably qualified and able to comply with a series of requirements to manage and offer offline and online gaming activities in Italy, including remote skill games. Several well known foreign bookmakers were recorded among the participants and are now entitled to organise betting operations.
Skill games with cash prizes offered remotely have been specifically regulated by the Ministerial Decree of 17 September 2007, that came into effect last November. Under the terms of this Decree, only operators who already hold the concession for the exercise of the public games covered in the Bersani Decree are authorised to offer such games remotely.
In order to combat any illegal or unauthorised form of remote gambling, the Financial Law for 20063 and the subsequent implementation Decree of 7 February 2006, gave AAMS the power to make it compulsory for internet and other network service providers and managers to block remote access to operators, without a permit or concession, from offering online lotteries, betting or pools with cash prizes to the Italian public. The 2007 Financial Law for 20074 that replaced the former regulations, and the subsequent implementation Decrees of 2 January 2007 and 29 May 2007, confirmed the powers granted to AAMS for combating illegal and unlicensed gambling so as to maintain public order and protect players.
Comments on the draft measure
The notified Decree may represent a first step towards the principle of mutual recognition concerning the provision of remote gambling services in Italy.
In accordance with this draft Decree, gambling operators and other entities will have to meet several compulsory criteria in order to operate and collect revenue from remote gambling activities (including the above mentioned skill games) in Italy.
The remote collection of revenue from gambling activities subject to remote gambling operating concessions currently granted to a sole entity (e.g. as it is for the State lottery; Super Enalotto; instant and deferred remote lotteries; etc.) may be carried out, in accordance with the relevant regulations by:
– the current concessionaire;
– under permit and optionally, by the concessionaires according to the above mentioned Bersani Decree, following receipt of a specific written application by AAMS and on the results of appropriate preparatory inquiries; and
– under permit and optionally, by any other entity who, possessing the criteria laid down in this draft Decree, from 1 January 2008, has submitted a written application to AAMS in order to obtain an activation right for remote sports/horse racing gambling networks and a permit for such remote collection of revenue.
The remote collection of revenue from gambling activities subject to remote gambling operating concessions, currently granted to two or more entities (e.g. as it is for sports and horse betting; sports pools; horse racing pools or any substitute game; remote skill games; etc.) may be carried out in accordance with the relevant regulations, by:
– the current concessionaires; and
– under concession and obligatorily, with exclusive reference to public gambling activities referred to in the above mentioned Bersani Decree, by any other entity who, possessing the criteria laid down in this draft Decree, from 1 January 2008, has submitted a written application to AAMS in order to obtain an activation right for remote sports/horse-racing gambling networks.
In such a case, the regulatory draft states that gambling operators and other entities having the economic/financial and technical/organisational abilities required to perform such activities and registered offices in a Member State of the European Union will be permitted to apply. The gambling operator is defined in accordance with the principle of mutual recognition, as ‘an entity that operates, in Italy or in another State, at least one type of gambling activity comparable with those included in the portfolio of gambling activities managed by AAMS, on the basis of a permit issued, as required, by the competent authority of the State in which the gaming operator has its registered office or operating base’. Nevertheless, the operator is required to demonstrate a specific turnover of at least €1.5 million in the last two completed financial years. Compulsory requirements have to be met also by the representatives and by the directors of the applicants.
Once authorised/licensed, the proposed measure makes it compulsory for the operators to promote responsible behaviour to protect players who must receive full information about the games being offered and their rules, and players must be assured of the safety, transparency and honesty of the games.
Finally, the regulatory draft sets forth the procedures for the remote collection of revenue from public gambling activities and for user participation.
The proposed measure is now at the first stage of the notification process and unless its evaluation puts in evidence unjustified barriers between the Member States, the Decree shall come into effect after the course of the standstill period, fixed at 31 March 2008 and its compulsory publication in the Italian Official Journal. With the entry into force of the Decree, the remote gambling services shall represent the last and maybe the greater evolution of the Italian gambling market.
1. The following activities are not controlled by the AAMS: casinos, tombola, bingo and lotteries associated with local events and whose total prize value does not exceed 51,645 and prize competitions associated with sales promotions.
2. Article 38 of Decree-Law no. 223 of 4 July 2006, converted with amendments by Law no. 248 of 4 August 2006.
3. Law no. 266 of 23 December 2005 (Financial Law for 2006).
4. Law No. 296 of 27 December 2006 (Financial Law for 2007).