Alessio Crissantemi, editor of Gioco News, an Italian gaming magazine, moderated a discussion on the recent changes and upcoming reforms in Italy’s online gaming market during a workshop on the Italian market by by GiocoNews.it and IGE, held at the Excelsior Hotel as part of Malta Week. The conversation featured insights from Stefano Spordoni, a legal expert in Italian gaming law and Founder of Sbordoni & Partners; Barbara Beltrami, Italy Country Director at Kindred Group; and Stefano Tino, Managing Director for Italy at Betsson Group.
Market dynamics and regulatory changes
In recent years, the Italian gambling market has faced significant regulatory changes, with strict advertising bans and new rules impacting both established and emerging operators. As the industry grapples with these changes, discussions among key stakeholders highlight pressing challenges and potential paths forward.
The Italian government is enacting significant reforms to the online gaming market, introducing a new licensing framework. The upcoming tender, scheduled for early next year, targets streamlining market players, with an emphasis on fostering larger, more stable operators capable of making substantial investments and ensuring regulatory compliance. Barbara Beltrami noted that this approach aligns with Italy’s desire for a more secure and reputable gaming market, though it may restrict smaller companies’ access.
Online and land-based market convergence
A central theme was the increasing integration of online and land-based gaming operations. Historically, Italian gaming companies were divided between purely online and land-based operators, with limited overlap. However, recent market trends, accelerated by the COVID-19 pandemic and an advertising ban on online gaming, have pushed land-based operators to expand their digital presence. This shift has brought traditional and online operators closer, blurring the line between the two market segments.
Advertising ban and market adaptation
The Italian advertising ban, while initially challenging, has spurred operators to develop creative brand strategies. Stefano Tino highlighted that the ban has driven companies to focus on brand identity rather than promotions, elevating the brand image of online gaming operators. Both panelists agreed that despite the challenges, the restrictions have pushed the market towards a more sustainable and recognizable brand strategy.
For new operators, entering the Italian gambling market can be challenging, as they struggle to establish their presence amidst stringent advertising restrictions.
While some operators have found ways to work within these limits, there is a general consensus that the ban requires re-evaluation, explained Barbara.
Many in the industry suggest that a more balanced approach to advertising regulation could be beneficial, where responsible branding is allowed, but excessive promotion of bonuses is limited. Giving operators the ability to advertise responsibly would help align the industry with customer protection goals without compromising market competitiveness.
Customer protection vs. market restrictions
While the intent behind Italy’s advertising ban is to protect customers from potentially exploitative marketing practices, some in the industry question its effectiveness. Statistics indicate an increase in traffic to non-regulated (dot-com) gambling sites, showing that the ban might inadvertently drive customers toward unregulated operators. Stefano Tino stated that, “If the goal is to protect customers, the current ban may actually undermine it by pushing customers toward sites without the same level of consumer protection.”
Italy’s regulated operators, by law, offer mandatory deposit limits, self-exclusion options, and report customer behaviours to regulators, which promotes responsible gambling practices. Yet, the rigid restrictions on marketing limit their ability to highlight these safeguards, making it harder for customers to distinguish between legal, regulated sites and potentially risky, non-regulated alternatives.
A call for regulatory clarity
A lack of regulatory clarity has been a long-standing issue in Italy’s gambling sector. Industry veterans recall multiple instances where conflicting instructions from regulatory bodies created confusion and hindered business operations. “Operators and regulators often seem to be speaking different languages, resulting in misunderstandings and delays,” explained Stefano Sbordoni. This disconnect can be especially frustrating for operators trying to comply with rules that sometimes lack the specificity required for consistent enforcement.
A well-defined and data-driven approach to regulation, combined with clear and consistent communication between authorities and operators, is essential. Operators argue that the government should make use of industry data to guide their decisions, ensuring that restrictions are applied only where there is concrete evidence of risk to consumers.
Investments in a shifting regulatory landscape
The recent introduction of Decree 41 imposes additional financial requirements on operators, further complicating matters. Companies are required to make significant investments in licensing fees without corresponding opportunities for growth through marketing. While established operators may have the resources to navigate these costs, smaller or newer entrants could struggle under the burden, making it difficult for them to compete.
On a positive note, recent adjustments in regulations allow operators to promote responsible gambling messaging, marking a shift towards a more balanced approach. This could signal a willingness on the government’s part to allow limited marketing opportunities, provided they focus on responsible gaming.
Insights from France’s regulatory approach
The Italian market’s challenges echo similar regulatory constraints seen in other European markets, like France. Recently, France opted not to regulate online casinos due to concerns about excessive taxation and operational constraints that could discourage legal online gambling. This decision reflects a broader trend: when regulations and taxes are perceived as too restrictive, they can drive operators and consumers alike toward unregulated markets, which ultimately defeats the purpose of regulation. French operators, unable to expand within their borders, are increasingly seeking opportunities abroad.
Challenges and future outlook
The upcoming tender appears designed to favor established players, with stringent requirements that could discourage new entrants. Barbara Beltrami expressed concerns about the lack of regulatory flexibility to support new companies and purely online operators, particularly around advertising.
“We are like treading in waters that are not very clear, and this is never good for business and for companies that have long term plans and want to succeed,” Beltrami said.
However, both Beltrami and Tino acknowledged that despite the potential drawbacks, the new framework could solidify the stability and quality of Italy’s gaming industry.
