New Italian Remote Gambling Rules Notified to the European Commission

The technical rules for the new Italian remote gambling licenses have been notified to the European Commission, which is one of the last milestones before the launch of the tender for new licenses in Italy. 

What is the notification to the European Commission?

EU law provides notification of legislative projects regarding products and information society services to the European Commission so that EU Member States and other interested parties can raise comments for a period of three months, the so-called “standstill” period.

In this context, Italy notified the European Commission, “The draft technical rules contain technical specifications that define the performance and functions as well as the technical requirements that the concessionaire must ensure for the operation and remote collection of public games,” which are the technical rules setting out the regime applicable to new remote gambling licenses to be issued by the end of 2024.

What is provided by the new rules on Italian remote gambling licenses?

The regime applicable to remote gambling licenses will not be changed entirely. Remote gambling platforms shall continue to exchange real-time messages with the servers of the technical provider of the Italian gambling authority according to the so-called communications protocols, which are predetermined messages.

The notified rules set the regime for technical compliance verification, specify the minimum technical requirements, and cover the operator’s IT structure and the necessary characteristics of the information system. This system includes several components:

• The gaming system for providing services
• The system for presenting the gaming offer (website and app)
• The gaming accounts system
• The accounting system for determining due amounts
• The monitoring and control system for the hardware and software infrastructure
• The telematic connection network for information transport

It’s mandated that the resources needed for the operator’s system infrastructure must reside within the European Economic Area, even if cloud computing solutions are used.

Specific provisions ensure maximum capacity, availability, scalability, performance, security, and data confidentiality guarantees. Measures are also in place for the Italian gambling authority’s supervisory and control actions. Particular emphasis is placed on mechanisms to prevent gambling addiction, such as self-limitations, self-exclusions, and blocking features.

The rules also address the regime applicable to operators who provide services for other concessionaires. In such cases, the gaming systems must be physically or logically separated according to the game type, ensuring the data for each dealer can be isolated.

What is going to happen next?

The standstill period will end on October 18, 2024, so the tender for new Italian gambling licenses cannot be launched before that date. Once this milestone is passed, unless changes need to be implemented to the rules, ADM, the Italian gaming authority, will launch a tender for new licenses whose main terms should be the following:

1. All the Italian remote gambling licenses will expire by the year’s end and cannot be renewed. It is possible to apply for a new license that is likely to be merged with the existing license already held by operators currently in the market to ensure the continuity of operations. There is no maximum limit on the number of new licenses, but each group cannot hold more than five licenses, and there will be a limited timeframe to apply for the license;
2. The price for each nine-year license will be EUR 7 million per license, to which an annual license fee equal to 3% of the GGR net of gambling taxes shall be added. Also, operators shall invest an amount equal to 0.2 of their GGR net of gambling taxes in responsible gaming campaigns;
3. Very stringent requirements are provided to meet the suitability criteria, and potential penalties are also increased to represent a deterrent for operators;
4. Substantial limitations are introduced to skins / white label sites since any license can be linked only to one website with an Italian top-level domain name, and the operator’s logo shall be shown on the homepage of the site. No provisions have been introduced to allow additional skins against the payment of a potential fee;
5. Shops selling top up cards to transfer funds to gaming accounts (the so-called PVRs) shall be recorded in a specific registry and pay an annual fee of € 100 per shop. Also, any gambling activity or withdrawal of funds from the shops appears to be limited;
6. More relevant rules have been introduced against the offering of games in Italy through unlicensed gambling websites and also through the implementation of payment-blocking measures.

Given the high price of new licenses, we see considerable M&A transactions since larger operators are acquiring smaller operators and merging their players’ databases.

At DLA Piper, we created a task force to assist clients in applying for these new licenses and in this transitional phase. Reach out to us to learn more. In a webinar, the recording of which is available HERE, we covered some of the most relevant topics relating to Italian gambling licenses.