Italian Gambling Advertising Ban to Begin 1st Jan 2019

Home » Poker News » Italian Gambling Advertising Ban to Begin 1st Jan 2019

Friday, July 13th, 2018 | Written by Lucy Brown

Italy is gearing up for a ban on gambling advertising that is set to commence on Jan. 1, 2019. The measure was approved by the Council of Ministers on July 2, 2018, although it must still pass a parliamentary vote within two months before being put into practice.

The gambling ad ban is part of a package of legislation known as the Dignity Decree, which is mostly related to jobs and employment. Commenting upon the drastic new legislation that is set to dramatically impact the country’s lucrative gambling industry, its chief backer, Deputy Prime Minister Luigi Di Maio (photo), stated:

“I think this is an industry that has become a bit too big, at the expense of people’s health and dignity: we are going to cut it down in size.”

About the New Advertising Rules

The new regime for gambling advertising is among the most draconian to be found anywhere in the world. Advertising any form of gambling products or services will be prohibited across all media channels. Furthermore, Italian sports teams would be barred from being sponsored by gaming firms, although such sponsorships that already exist will be permitted to continue until all outstanding contractual obligations are fulfilled.

Entities that violate these restrictions could be fined €50,000 at a minimum, and up to a maximum of 5 percent of the total value of the advertising. Not only will the companies placing illicit advertising messages be subject to these penalties, but media organizations that run them and sports clubs that accept gambling firms as partners will also be punished. When dealing with advertising that caters to underage audiences, these fines grow to between €100,000 and €500,000. Revenues so derived will go toward combating problem gaming.

Interestingly, the only form of gambling not covered by the Dignity Decree is the state-run national lottery.

Reasons for the Prohibition

This measure was strongly backed by Deputy Prime Minister Luigi Di Maio. He touts the new advertising prohibition as a necessary step to protect consumers. A 2015 report commissioned by the Italian government stated that there may be up to 1.3 million citizens with a gambling problem in the country, but that fewer than one-hundredth of this number had sought out the appropriate treatment.

Di Maio has responded to his critics, who feel that he is attempting to enact a prohibition on gambling. He noted that the legislation only prevents enterprises from advertising, not from operating gambling concerns as long as they’re properly licensed.

Gaming Industry Dismayed

Almost all parties involved in the Italian gambling sector have expressed their disapproval of the new law. One of the most outspoken of them has been Niklas Lindahl, the managing director of the Italian branch of betting firm LeoVegas, one of the companies licensed in the country.

He argues that preventing legitimate businesses from advertising merely drives customers into the arms of possibly unscrupulous unlicensed groups. After all, these offshore companies hardly have any incentive to comply with the new advertising protocols. Even if it proves difficult for these unregulated firms to purchase ads directly in Italy, broadcasters based elsewhere will almost assuredly carry their messaging. Unless Italy were to take the impractical step of blocking all outside transmissions (including the internet), it will be impossible to stifle these marketing efforts.

New Ban Illegal?

Questions have been raised in some circles as to the constitutionality of the gambling advertising prohibitions contained in the Dignity Decree. After all, Italy’s constitution enshrines the right to conduct business freely so long as that business isn’t contrary to “security, freedom and human dignity.”

Many real money gaming companies, particularly those that only operate online, believe that the new law will effectively bar them from the market. The internet is specifically mentioned as one of the venues through which Italian-licensed entities will not be permitted to advertise gambling-related products and services. This might mean that no promotional emails could be sent, and no bonus codes or other welcome specials could be marketed. Under the strictest reading of the law, even just running a gambling website would be disallowed for legally licensed organizations, which does indeed seem to unduly impinge on their right to freely do business.

If the government counters that such business activities are against “security, freedom and human dignity,” then the authorities would be in the awkward position of having to explain why there is a licensed gambling environment in the first place. They would also face the embarrassment of justifying the lucrative (for the state, not the ticket buyers) national lottery games.

Because a proscription on advertising would probably count as a significant alteration of the business climate for gaming enterprises, they might be able to sue. They’ve paid €200,000 for each gambling license, and they are now in a much worse position to realize returns on their investments. Thus, even if the prevention of gambling advertising turns out to be constitutional, Italy may still be legally liable and have to refund a substantial portion of the income derived from licenses.

Sporting Leagues Impacted

By disallowing sponsorship deals, the Dignity Decree is cutting off a major source of funding for Italian sports teams. In the country’s top soccer league, Serie A, more than half of the members currently receive sponsorship money from gambling firms. An estimated €120 million could vanish from club coffers as a result of the law.

It’s actually worse than this because the value of TV and radio broadcasting concessions would be reduced too. Gambling adverts comprise a non-trivial portion of the revenue that media outlets realize from their coverage of sports contests. Now that they won’t be able to show such content, Italian sport will become much less valuable to them as a consequence. Summing up the untenable situation, a Serie A League explained:

“(Preventing betting firms from) investing in promotion in our country could lead to competitive disadvantages for the Italian clubs, with advertising budgets destined for our teams going abroad instead.”

Broad Opposition

Gambling industry groups, like the European Gaming and Betting Association and local body LOGICO, have come out in opposition to the new government policy. So too have sports organizations, headlined by the Lega Serie A. They hope to be able to soften the provisions of the Dignity Decree before the final wording is enacted by parliament. They’ll have to act quickly though because the legislature is expected to pass the law within 60 days.