Kogem partner warns Italy’s 2027 budget may affect gaming concessions

Italy's Council of Ministers announced the approval of the 2027 budget bill at its sitting on 28 October, and the official statement from the Presidency of the Council of Ministers lists the gaming sector among the areas called on to contribute to financing the measures, without specifying the nature or size of individual measures, according to the statement. Emanuele Sipala, a partner at consultancy Kogem, said press reports have suggested possible interventions concerning the excise duty on amusement machines, extensions of physical gambling concessions and some arrangements for organising and managing gaming products. Sipala said those indications require confirmation in the text of the bill and its technical report, particularly to distinguish expected financial effects from the actual economic consequences for the whole supply chain.

Sipala said the excise revenue cannot be treated as independent of the economic conditions of the market that generates it. He said higher duty rates or new concession charges can produce more revenue, but their effectiveness should be assessed in light of possible changes in the behaviour of operators and consumers, including effects on company margins, commercial policies, the territorial distribution of supply and, under certain conditions, collection volumes. He said the possible increase in the Prelievo erariale unico (PREU) on AWP and VLT machines is relevant because the tax applies to collection rather than to the net economic result, so even contained rate changes can have significant consequences for the economic balance of those in the chain. He said the impact should be analysed across concessionaires, managers, operators and others involved in organising collection, since the distribution of effects depends on contracts, revenue sharing and the capacity of the various operators to absorb further costs.

On concessions, Sipala said press reports point to a possible extension of concession relationships for betting, bingo and amusement machines until 2029, but that the duration and economic conditions will have to be verified in the legislative text. He said an onerous extension can give the state new resources while ensuring continuity of existing activities, but that repeated use of the mechanism raises questions about investment planning and the stability of the regulatory framework. He said uncertainty over the duration of licences, future tender conditions and the evolution of territorial rules can affect the ability of companies to plan investments and development strategies, and that completing the reorganisation of physical gambling is also a precondition for greater predictability of market conditions.

On the online segment, Sipala said the recent award of new ADM concessions involved significant financial commitments for operators, in addition to investment needed to comply with new technical and organisational rules. He said the economic sustainability of that investment is closely tied to the predictability of regulatory and tax conditions, and that changes to the tax regime, especially if introduced shortly after the new concessions began, could affect the economic assessments behind participation in the award procedures. He said this does not exclude the possibility of tax measures but underlines the importance of considering their effects against a framework of obligations and investment already defined.

Sipala said the concession system is the instrument through which the state organises and controls authorised supply, with requirements on security, traceability of transactions, anti-money-laundering prevention and consumer protection, and that maintaining an economically sustainable legal market is functional to the effectiveness of the regulatory system. He said rising costs and charges for authorised operators could, under certain conditions, affect the competitiveness of legal supply against unauthorised circuits, and that this risk should not be treated as an automatic consequence of every tax measure but should be examined in assessing public policy. He said tax policy and the fight against illegal gambling should be treated as parts of an overall strategy.

Sipala said the contribution sought from the gambling sector in the 2027 budget law should be assessed across at least three linked dimensions: expected revenue, the economic sustainability of operators and the ability of the regulated system to maintain a competitive and controlled supply. He said the technical report accompanying the bill will be a key document for understanding how the financial effects of the measures are quantified, and that it will be important to check not only projected revenue but also the economic assumptions used to estimate it and any effects on the different market segments.