Italy’s stalled retail gambling reform leaves courts to write the rules

Italy’s land-based gambling reform is stuck in political limbo, leaving judges rather than lawmakers to set the rules, industry leaders warned at SBC Summit in Lisbon last week.

Speaking on the “Beyond the Reform: The New Italian Gaming Landscape” panel on Wednesday 30 September, Quirino Mancini, co-founder and executive committee member of IMGL, said he could not see any government tackling the reorganisation of the retail network before Italy’s next general election.

“I would struggle to imagine that, in the year before elections, any government, no matter the colour, would seriously address the reorganisation,” he said.

“Gambling is a very sensitive issue, and that is the reason why, in my view, we are where we are.”

A ten-year wait

The stalemate matters because retail still accounts for roughly three-quarters of Italy’s gambling market, worth more than €21 billion. While the online sector is completing a sweeping overhaul, with new rules taking effect on 13 November, the land-based reform has yet to begin.

Mancini noted that the first reference to reorganising the network dates back to the 2016 Stability Law, “a good ten years ago”. The technical framework is largely agreed, he said: central government sets network size, density, opening hours and distances from sensitive sites, while regions and municipalities handle implementation.

“The issue stands in political terms much more than in organisational, logistic or regulatory terms,” he said.

Council of State steps in

The panel coincided with the publication of a Council of State ruling on Italy’s top-up outlets – known as PVRs – the shops where players load cash into online gaming accounts.

The court upheld the €100 weekly cap on cash and non-traceable top-ups, in force since May, and confirmed the ban on withdrawals at PVRs. It struck down, however, a blanket ban on internet-connected devices in the shops, finding it disproportionate.

Asked for his reaction from the floor, Mancini said: “Wherever there is a vacuum in the legislative power, the judicial one steps in, and that becomes the regulation, which is never a good thing,” he said.

“With all due respect to the magistrates, most of the time they do not know exactly how our industry works.”

Uncertainty is taking its toll

For operators running both online and retail businesses, the mismatch is a daily problem. Davide Diodato, CEO of Novomatic-owned HBG Online, said online licences ran on a nine-year clock while retail concessions were extended year by year.

“You don’t fly aircraft with two flight plans and different information. But it’s actually what we have to do every day. So it’s pretty tough.”

The uncertainty is especially taking its toll on the small shopkeepers who make up the retail network. “Every year, they ask us what’s going to happen next year,” Diodato said. “If you put yourself in their shoes, it’s pretty hard to invest, to hire people.”

Sisal managing director Marco Tiso said retail was still governed by rules “largely designed 20 years ago”, calling it a “missed opportunity”. Players face different products, payouts and promotions depending on the channel, he said.

Biggest effect is consolidation

On the online side, Microgame CEO Marco Castaldo described Italy’s new regime as “hyper-regulation” with a level of complexity “hard to find anywhere else”, and said many regulated markets will look like Italy within a few years.

The biggest effect, he said, is faster consolidation. When the moderator, Mauro De Fabritiis of MDF Partners, presented figures on market concentration, Castaldo pitched in: “Today, the top five account for 85% of market GGR, and that’s going to go up.”

He predicted market leaders buying up rivals would be the winners, while most small operators merging to build scale would lose out.

Fabio Bufalini, country director of Stake Italy, said licensed operators are hampered by being unable to advertise bonuses while unregulated sites promote freely on social media. “That’s unfair competition, to be clear,” he said.

Retail’s next chapter

Panellists agreed the online outlook is strong, with penetration still between a half and a third of some northern European markets. But several argued that retail’s role is changing rather than shrinking.

“There will always be value in a face-to-face experience and physical involvement for the player,” said Castaldo. The question for each operator, he added, is what experience it wants to win with, and what part digital plays in that.

Tiso said shops will move “from the concept of a point of sale to a concept of a point of assistance, a point of meeting”. 

He sees room to bring new customers into casino-style products through retail, provided certification is streamlined so it does not stifle innovation.

Earlier in the session, Tiso had predicted a reversal of the traditional flow of players from shops to online. “Probably tomorrow it will be the online that will send customers to the retail shops,” he said, where they can complete their experience with the social, community side they cannot get online.

Online touch point

Diodato said the generational shift is already visible. For the past 15 years, many of the industry’s most valuable players reached their online accounts through shops and land-based affiliates. For younger players, the first touch point will instead be “a piece of content online, a product, a community, a friend”. Retail, he suggested, could shift from an entry door to a retention tool.

Even Stake’s Bufalini, whose business is purely online, said he does not see the future of retail as being in opposition to online, arguing that the industry and the regulator need to treat the ecosystem as a whole.

And retail holds the one asset the illegal market cannot copy, noted Diodato.

“They can copy our games,” he said. “But they can’t have the bond with the territory that we have.”