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During the last days everyone has been discussing about the “crazy” potential Italian gaming tax changes and the consequences of the decision of the European Court of Justice on the Costa Cifone case involving the Italian licensing regime. However maybe it was slightly missed the exact scope of the decision.
As background information Stanley Bet runs in Italy a very successful business model based on 200 agencies in the form of DTCs i.e. these agencies do NOT hold any Italian land-based or online gaming license issued by the Italian Gaming Authority (AAMS) and do NOT pay any Italian gaming taxes, but are mere Internet cafes that offer bets under the Stanley’s UK gaming license. Mr. Costa and Mr. Cifone were the managers of two Stanley’s DTCs to whom the offering of games without the required Italian AAMS gaming had been challenged.
As background information Stanley Bet runs in Italy a very successful business model based on 200 agencies in the form of DTCs i.e. these agencies do NOT hold any Italian land-based or online gaming license issued by the Italian Gaming Authority (AAMS) and do NOT pay any Italian gaming taxes, but are mere Internet cafes that offer bets under the Stanley’s UK gaming license. Mr. Costa and Mr. Cifone were the managers of two Stanley’s DTCs to whom the offering of games without the required Italian AAMS gaming had been challenged.
Stanley has been fighting against the Italian gaming license regime for the last decade and surprisingly Italian license rules have always been drafted in a way allowing Stanley to properly set up their defense. In this specific case Stanley challenged the call for tenders of 2006 for the award of the so called Bersani gaming licenses and in particular the European Court of Justice held that the provisions of the Bersani call for tenders imposing on only new licensees a minimum distance between betting shops were actually protecting the market positions acquired by the already established operators and therefore they were discriminatory against other participants to the procedure and in contrast with EU principles.
Moreover, the European Court of Justice challenged the imposition of criminal penalties against persons (i.e. Mr. Costa and Mr. Cifone) offering bets that are linked to operators (i.e. Stanley) that were excluded from tendering procedure for the award of gaming license for reasons in contrast with EU principles as provided by Placanica case. Indeed, the court held that the decision on the Placanica case was issued 4 months after the deadline for the participation to the Bersani tendering procedure and therefore the latter had not “cured” the lack of compliance challenged in the Placanica case.
The good news is that a new tendering procedure for the award of new betting shop gaming licenses is expected to be launched shortly and in such circumstance Stanley will not in the position anymore to rely on the Placanica case…. Consequently their model of business might still have a short life in Italy.
Also, it is good to mention that the European Court of Justice in none of the contents of its decision challenges the compliance of EU laws of the obligation for operators offering games in Italy to hold an Italian remote gaming license. The scope of this decision appears to be limited to the peculiarities of Stanley Bet case since their exclusion from the tendering procedure of 1999 was found not to be compliant with EU laws in the Placanica case.
Operators other than Stanley and, as a consequence of the new tendering procedure, Stanley itself shortly, will find difficult to rely on this court decision. As a consequence of that, the current Italian online and land-based licensing regime remains unaffected after this decision especially after the implementation of the new rules on remote licenses last year that have put in place a fully EU-compliant regime.
It is good to say…lots of noise for nothing, but if you want to discuss about it. Feel free to contact me, Giulio Coraggio.
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