Italian budget bill proposes higher AWP and VLT taxes from 2027

Italy's 2027 budget bill proposes raising the single tax on gaming machines, with the technical report accompanying the draft law setting out the expected revenue effects. Article 23 of the bill would increase the PREU by one percentage point, from 24% to 25% for AWP machines and from 8.6% to 9.6% for VLTs, according to the report. The government forecasts additional revenue of €334m in 2027, €365m in 2028 and €456m a year from 2029, plus €15m in 2027 from the regularisation of machines that do not pay cash winnings.

For AWP machines, the bill would double the maximum stake from €1 to €2 and the maximum win from €100 to €200. From 1 January 2027, AWP machines configured to return at least 70% of amounts staked would qualify for a reduced PREU rate of 20%, five percentage points below the new standard rate. The report says the measure is intended to encourage renewal of the machine fleet and counter the decline in collections in recent years, and it assumes the new devices could generate collections 30% higher than under current law.

The transition would be gradual. Using about 230,000 AWP machines in operation in 2025 as a reference, the report estimates take-up of the new regime at 10% of machines in 2027, or 23,000 units, 30% in 2028, or 69,000 units, and the whole fleet in 2029. For AWP machines, the report estimates collections of €15.021bn in 2027 against €14.583bn without the measure, with PREU revenue rising from €3.5bn to €3.66bn, an increase of €160m. In 2028, AWP collections are estimated at €14.988bn against €13.75bn, with revenue up €179m. From 2029, with all machines in the regime, collections would reach €16.792bn against €12.917bn under current law, with additional revenue of €258m.

For VLTs, the report does not assume any change in collections from the PREU increase. The additional revenue would come solely from the higher rate: €174m in 2027, €186m in 2028 and €198m a year from 2029. Combined, the two machine types would contribute additional tax revenue of €334m in 2027, €365m in 2028 and €456m from 2029.

Article 24 of the bill covers amusement machines without cash winnings. It would raise the maximum cost per game from €1 to €2 for machines identified under Article 110, paragraph 7, letter a) of the TULPS, and because prizes in goods may be worth up to 20 times the cost of a game, their value could reach €40. The main revenue measure is the option to regularise certain categories of machines already installed, including devices predating 1 January 2003 and mechanical and electromechanical machines meeting the conditions set by the provision.

To keep such machines in operation, owners would have to file a substitute declaration with ADM within 60 days of the law entering into force, covering the devices' characteristics, conformity and location, and pay €1,000 per machine by 30 April 2027. Assuming 15,000 machines qualify for regularisation, the report estimates additional revenue of €15m in 2027. It also notes possible indirect effects on revenue from the entertainment tax (ISI) from the greater appeal of the devices and from keeping in operation machines that would otherwise have had to be removed, but does not quantify them for prudential reasons. The same approach applies to revenue from new administrative sanctions, including those of €100 to €500 where machines are located somewhere other than declared.

Taking the additional PREU revenue under Article 23 together with the one-off €15m estimated for regularisation, the report puts the total increase in revenue at €349m in 2027, €365m in 2028 and €456m a year from 2029.