Since the shutdown of the US market in the end of September 2006, the European gambling market (estimated to be worth €50bn ) became even more interesting for the gaming industry.

Italy

In response to our recent newsletter piece on the Italian market Torbjörn Ihre, Head of Public Affairs for the European Betting Association offered the following insight.

Italy is pursuing an "open to all" licensing program for some online products (namely sports with skill games and bingo to come) but it is highly doubtful whether it is a solution that is compatible with European law. It is rather an undisguised attempt to generate revenue for a country that is having severe financial difficulties.

While many operators from outside Italy have applied for licenses, there are onerous (we say disproportionate and unnecessary) conditions attached and the Italian regime remains discriminatory as against holders of licenses from other EU/EEA jurisdictions. Apart from the gaming taxes which start at 3% and go upwards as high as 15.7% for horse-racing, operators have to locate servers and a corporate enterprise in Italy which then attracts corporation tax at a rate of around 38%. All on top of the €300,000 license fee.

So liberalization may be the right word but it is not in a form that is compatible with Italy 's obligations under Article 49 and for which it is currently being investigated by the European Commission in two separate infringement proceedings.

Bullet Business thank the EBA for providing even more information on the current stance of the European market and would urge other to contribute their view by contacting debate@bulletbusiness.com today.

The European Betting Association (EBA) is an association of leading European sports betting operators. EBA is a  Brussels based non profit making association. It promotes the right under EU law for members based and licensed in one member state to promote their services in, and accept business from, all other EU member states.

More news on Italy...

More than 30 companies including Betfair, Willian Hill and Unibet have recently received licences to offer remote gaming in Italy. Other forms of gaming like land-based casinos, remote casino gaming, remote wagering on skill games and p2p betting exchanges are also being regulated. Rome is also going to award new gaming licences to a range of national and international companies. The government through its monopoly arm AAMS is going to auction off 17,000 licences for horse racing and sports betting shops, betting kiosks and other outlets.

On the one hand, one can see this as a reaction to the complaints of foreign operators which lead to two infringement procedures of the European Commission against Italy. On the other hand, Prime Minister Romano Prodi sees this as a pragmatic move to cut the country's deficit of €11.2bn. The fast growing gaming industry in Italy is expected to generate enough income for the State to solve its budget problem.

Spain

The Spanish federal government has opened the markets to the gaming industry. They enacted legislation and allowed the regional governments to impose conditions for this legalisation. The regional government of Madrid for example established a fixed number of licences for a fixed licence fee last month. With such a licence you are allowed to open as many shops and outlets as you want in the region of Madrid.

Germany

A critical political decision in Germany is still expected. At a meeting on December 13th the Prime Ministers of the German Federal States approved a State contract which should uphold the monopoly for another four years with 15:1 votes. However they did not sign the Treaty. So everyone now waits for the European Court of Justice decision in January which should deal a firm decision against European state monopolies in the gaming sector. We wait to see if Germany being the European country with the highest population will follow the trend and constructively liberalize its gaming markets.

South Africa

The South African Government approved the Draft Gaming Amendment Bill on this years' final meeting on December 6th. This bill proposes to amend the National Gambling Act 2004. The National Gambling Board has to be mandated to regulate 'interactive gambling'.

Information provided by:

Benjamin Krell
PKF Malta & Co.
Tel: +356 2148 4373
Fax: +356 2148 4375
benjamin.krell@pkfmalta.com