1. Slots in the Italian legal market
Casino games are an important segment of Italian gambling market since their launch, in July 2011, but it had been slots introduction, delayed to December 2012, which triggered its strong still persisting continuous growth. Slots GGR is now 70% of total casino games, which reached 45% of total Italian gambling market, thanks to them.
Growth occurred consequently illegal market absorbtion, thanks to providers decision to waive operators without Italian licence. It is vital to ensure product competitiveness against illegal offer. Nevertheless four years and a half after slots’ launch legal offer competitiveness is still penalized by a product limitation. It must be removed.
2. Progressive jackpot
On the dot.com market progressive slots provide an initial jackpot different from zero, which ensure winning appeal since the beginning, before progressive accumulation of contributions funded by bets to jackpot. When jackpot is won the initial value is immediately re-seeded.
At introduction of slots on the Italian market ADM’s Remote Gambling Office requested licensees to give up offering jackpot with initial value different from zero. That was not an ADM provision but a “gentlemen agreement” only, which all licensees then accepted and still enforce. The reason for that limitation was need to further deepen how jackpot’s initial value should be treated as for the calculation of the taxable basis and, consequently, of the gambling tax. In fact, for the purposes of tax calculation contribution from each bet to jackpot is immediately considered as a winning. Consequently jackpot contribution taken from each bet algebraically contributes, with a minus sign, to calculation, for each single gambling session, of the amount held by licensee, which is the taxable basis. Conversely jackpot amount takes part to calculation of taxable basis at the moment it is won, because the jackpot already holds the “nature” of winning and is not available to licensee before the winner trigger the winning combination. Initial jackpot equal to zero limitation should have been an only temporary measure but nothing is changed instead since then.
In truth, some licensees have identified and adopted solutions that provide a unequivocal answer to taxable basis calculation, but those are partial solution. It seems instead opportune ADM provides a complete and institutional solution.
3. The two partial solution already adopted by some licencees
Hidden progressive jackpot
Progressive slots of a well-known provider, which network many Italian licensees join to, provide jackpot is shown to player an can be won only when fund reaches a minimal threshold. Before that moment jackpot is not assigned i.e. to all effect is not available for winning.
The progressive jackpot RTP is zero before fund reaches the threshold and is higher than the theoretical value subsequently. The statistical average value is identical to that of progressive jackpot starting from zero available since the beginning. Contribution to jackpot is funded also before jackpot is available to player and it always takes part to taxable basis calculation at the moment of bet.
Jackpot made up of a fixed component and a progressive one
Some licensee adopted a jackpot consisting in the sum of a fixed traditional winning and a progressive one consistent with progressive jackpot rules.
In other terms, the same combinations of icons in the reels contemporarily provides two winnings, a fixed one and a progressive one that is made up of contributions funded bet by bet progressively. The fixed component contributes to the taxable basis when the winning is awarded, the progressive component contributes instead to the taxable basis concurrently to withdrawal of contribution to the jackpok from each single bet. Total potential winning is shown to the player as a whole jackpot and holds an initial value different from zero.
4. The Italian solution to initial jackpot different from zero
The second solution above-reported could seem a sort of fall-back solution, but it is not so. In the event that is made official it is fully satisfactory, but for single licensee only, which are not joined in a network. Licensee can choose to provide limited or huge initial value of jackpot. It will adopt appropriate insurances and financial coverage to be able to properly cover risk of losses. After all careful risk management is fundamental for gambling against the house. Previous solution could be instead not satisfactory for licensees joined in a network. In this case, while all licensees contribute to made up the progressive jackpot component, coverage of the fixed component is instead in charge of the licensee that accepted the winning bet, as for any other fixed odds winnings. Such situation could make jackpot with big initial value problematic for minor licensees belonging to the network and it could prevent offer of huge initial value of jackpot, because risk would not be shared. Such solution must then be amended to make it apt to the network.
To that end is sufficient ADM lets to share the risk of initial value of jackpot, seen as fixed winning, among licensees belonging to the network. The initial value of jackpot becomes a “guaranteed” amount, analogous to guaranteed amounts of poker tournament. This is a non-progressive component of total jackpot that enters in the taxable basis at the moment jackpot is won, but in this case it is not paid only by licensee that holds winner’s gambling account and it is on the contrary shared among all licensees.
Initial value could be equally shared among licensees joined in the network or proportionally to contributions from bets they funded to progressive jackpot component, as well as on the basis of a combination of both criteria. Share provided by each licensee, which take part to calculation of its taxable basis, would be calculated by Sogei, as it is currently done for guaranteed poker tournaments. To this end it is necessary proper adjustment of PGDA protocol message, which does seem neither complex to define nor costly to implement. Nothing changes regarding taxable basis calculation of progressive jackpot component, which contributes to taxable basis at the moment of the bet.
Settlement among licensees to transfer due shares to the network’s member that holds the winner account, will be managed by the network, without any ADM ruling, as already it is for all games.
