Italy’s Gambling Market Up 11.4% in 2016

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Friday, March 24th, 2017 | Written by Charles Washington

News out of Italy suggests that its gambling industry is thriving, with the market generating revenues of €19.17 billion in 2016, representing a 11.4% improvement compared to 2015’s tally. Interestingly, slot machines produced €10.5 billion, or over half the country’s total market, representing an increase of 10% year-on-year. Proposed changes to Italy’s gambling laws, however, could potentially affect its lucrative slot machine sector.

Social Cost of Slot Machines

Before resigning in December of 2016, the former Italian Prime Minister Matteo Renzi announced that his party intended to introduce legislation to ban the use of slot terminals outside of casinos. These machines are found in many bars, cafes and newsstands in Italy and brought in €8.7 billion in gross gaming revenue taxes for the Italian government in 2015 alone, including licensing fees. Renzi said that although the machines have proven profitable, their negative societal impacts require that their usage should be more closely controlled.

According to a government report released in October of 2015, there are around 1.3 million problem gamblers in the country of 60 million people, with only 12,000 receiving treatment for their addiction. In early 2016, the island of Capri became the first place to ban slots from “inappropriate’ areas”, such as near schools, churches, tourist beaches, and cash machines. It now appears that Paolo Gentiloni’s government is planning on following suite, with the new law described making it illegal to have slot machine games in restaurants, hotels, beach resorts and shops that are not casinos, as well as significantly cut down on the number of slots at newsstands and bars. As a document released following Italy’s Joint Conference stated:

“While on the one hand [slots] provide important tax revenues, on the other hand they entail important social consequences which cannot be ignored as they have been in past years.”

Sports Betting Up 20.6%

The news came on the heels of a report about Italy’s gambling market in 2016, which posted an impressive 20.6% increase in revenues to €925.7 million, with the figure including both online and land-based wagering. Furthermore, sports betting continues to be a major source of revenue for online operators, as highlighted by February 2017’s results which shows just how strong the market has become.

Overall, online sports betting generated €432 million in gross gaming revenue last month, while wagers placed at casinos brought in €394 million. All in all, Italians spent €828 million betting on sporting events, 7 percent more than they did in January 2017, and 30 percent more than the total spent in February of 2016. Bet365 is the largest online sports betting operator, bringing in one-third of all of the revenue.

Online Casinos Post Solid Results

Online casinos are also faring well in Italy, and last year generated revenues of €579.7 million, higher by 20.8% year-on-year, although the numbers also include online poker. In February, the country’s gross gaming revenues from online casinos rose by 25 percent to €41.1 million compared to January 2017’s numbers. Lottomatica led the pack, making 10.7 percent of those revenues, while Sisal was a close second at 8.6 percent, with the operator having increased its gaming revenues by 33 percent compared to 2015.

iPoker Continues to Languish

While much of the online gambling market is performing above expectations, online poker is languishing in Italy, with the downward trend in revenues continuing into February 2017. As a result, poker tournament fees fell by 16.5 percent, and revenue from cash games dropped by 11 percent. PokerStars is the strongest operator in the vertical, bringing in 42.5 percent of all tournament fees and 69.2 percent of all cash game revenues. The site’s online casino section is also performing well and has grown by 28.6 percent since 2015.

Overall Positive Results

As mentioned, Italians spent 11.4% more on gambling last year compared to 2015, with more than 50 percent of gross revenues coming from slot machines. This obviously indicates that if Prime Minister Paolo Gentiloni is successful in raising taxes and tightening restrictions on slots, the industry will undoubtedly be affected. Meanwhile, Italy is expected to launch its tender process for internet gaming and betting licenses soon, with the latest numbers out likely to add further to high expectations of potential bidders. Once an operator is accepted, they will then have 9 months to receive the technical go-ahead to offer at least one type of game.