I.
Introduction
As the number of remote users of online games and betting services
increases, the presence of foreign bookmakers operating in Italy, either
directly or through local affiliates, has made it necessary to implement
legislation capable of preventing illegal gambling without prejudice to
the possibility to operate under the Freedom of Services (“FOS”)
principle.
Online Games and Gambling in
Italy
In several occasions, the European Court of Justice (“ECJ”) has
reprimanded Italy for its laws on online games and betting that hinder
the possibility for bookmakers, duly authorized in another EU Member
State, to operate in Italy, thus exposing them to fines and criminal
liability for not operating under the umbrella of Italian law (see:
Stanleybet, Placanica; see also ECJ IP/06/436 and IP/06/1362).
Specifically, the ECJ has held that Italian legislation of online games and
betting violates the FOS principle established under articles 43 and 49
of the EC Treaty and has urged for amendments capable of creating a
market accessible to foreign betting agencies.
Italian lawmakers have adopted landmark pieces of legislation on games
and gambling throughout the years that have opened the path to the
legalization of new technologies in the betting industry. The first step in
this direction was taken under Presidential Decree 169/98 that
envisaged online betting on horse races for the first time while
Ministerial Decree 156 of 15 February 2001 issued by the Ministry of
Finance extended online betting to all games.
However, the process leading to the possibility for authorized foreign
bookmakers to operate in Italy was not as quick. It was not until 2009,
and under the boost of the ECJ, that Italy amended its laws on online
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games and gambling making it possible for foreign bookmakers to
access the highly regulated Italian market.
The Civil Code establishes that, if a game or betting are lawful,
gambling debts are not enforceable however, if the debtor has
voluntarily honored his gambling debt he cannot recover the amount
paid. However, the creditor may enforce gambling debts if they refer to
sporting events or national lotteries. No recourse or action is envisaged
for unlawful games or gambling.
This memorandum shall examine the rules on online games and
gambling as in force to date and the authorizations, licenses and
permits that are required to operate on the Italian market.
II.
III. Italian laws on games and betting
AAMS
Prior to analyzing the applicable rules on online games and gambling
activities, it appears appropriate to briefly address the Italian regulatory
authority in the field.
Games and lotteries were originally organized and managed by a
Special State Monopoly Service (Monopolio di Stato) under the control
of the Ministry of Finance. Within the scope of a general reorganization
duties, powers and responsibilities, under Law 357/88 the State
Monopoly Independent Administration (Amministrazione Autonoma dei
Monopoli di Stato – “AAMS”) took over the management of national
lotteries and lotto. AAMS became progressively responsible for the
management of other games, such as instant lottery games, bingo and
skill and chance games , and is now the regulatory authority of public
games and gambling activities in Italy.
With a view at securing the lawfulness of games and betting within the
context of public policy, Italy has adopted a stringent legislation
regulating such activities. Precisely, in pursuance to Article 4 of Law
401/89, a concession is required to organize games and gather bets.
Instead, as far as bookmaking and gathering bets are concerned,
concession holders or other authorized parties are required to hold a
license, issued in accordance with Article 88 of the Unified Code on
Public Security (Testo Unico delle Leggi sulla Pubblica Sicurezza –
“TULPS”) is required to perform and this activity may be lawfully
performed subject to.
The concession and license requirements applies also to online games
and betting and shall be examined below.
AAMS has taken over State functions in the field, primarily with regards
to the collection of applicable takes on gaming activities, and its mission
is to promote a legal and responsible gaming environment.
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IV.
h) lotto and lotteries.
Concessions
Concessions for online games and betting are governed by the
provisions contained in Article 24 of Law 88/09 on the compliance with
obligations related to EU Membership.
According to Article 24, para. 15, an applicant for a concession must
possess the following requirements:
As a preliminary matter it is noteworthy to point out that Law 88/09 has
seized the ECJ’s recommendations to grant access to EU Member State
operators in pursuance to the FOS principle.
In this regards, as
opposed to previous legislation, Law 88/09 expressly provides that a
concession may be granted to a person that operates games or betting
activities in an EU Member State, thus overcoming any violations of the
FOS principle.
Concessions granted in accordance with Law 88/09 cover wide variety of
games such as sporting events, lotto, bingo, skill games (including
online poker and card games), and lotteries. Precisely, concession
granted under Law 88/09 may authorize the following activities:
a) betting on sports events
a) Manage gaming and gambling activities on the basis of a valid
authorization granted in an EU Member State or in a State
belonging to the EEA where it shall have its registered office,
and have yielded a turnover for the of at least Euro 1.500.000
from said activities in the two years preceding the application;
b) If letter a) does not apply, technical know-how and
infrastructures to be verified by an independent expert and
release of a first demand guarantee to AAMS in the amount of
Euro 1.500.000;
c) be incorporated as a corporation with registered offices in an EU
or EEA Member State;
d) the chairman of the board, directors and officers must meet the
reliability and professional requirements set by law;
b) prediction of sports and horse racing
c) national horse racing
e) the infrastructures, hardware and software must be located in an
EU or EEA Member States;
d) skill games
e) fixed odds betting
f) pay AAMS a flat rate fee, as compensation for the entire duration
of the concession in the amount of Euro 300.000 plus VAT; the
amount of the fee is reduced to Euro 50.000 if the application is
for bingo operations.
f) bingo
g) totalizer games
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g) Undertaking the obligations set forth under Article 24 para. 17
which include, inter alia,
i.
under Article 24 para. 19 of Law 88/2009 and establish that the contract
must, inter alia, provide that:
to provide AAMS, upon request, evidence that it continues
to possess the requirements for holding the concession
and to inform AAMS of any variations of same;
a) the agreement will be governed by Italian law;
ii.
to adopt adequate measures to limit access by minors;
c) the concession holder shall not dispose of the monies on the
game account;
iii.
to adopt adequate measures inhibit gambling dependency
iv.
to promote responsible behavior;
d) any amounts on the game account shall be credited to the player
within no later than 7 days from the latter’s request;
v.
to provide AAMS with whatever documents may be
necessary for surveillance and monitoring purposes.
e) the duration of the game account shall not exceed the duration
of the concession;
Existing concessions may be extended to additional games and betting
upon payment to AAMS of the applicable flat for the various types of
games (see: Section V below).
f) all monies on a game account shall be diverted to the Tax
Agency if they are not claimed within 3 years.
AAMS shall process applications within 90 days from the date of filing;
this term may be suspended if additional documentation is required and
will start running once the documentation is complete. If AAMS does not
issue the concession within the 90-day term, the consenting silence
principle does not apply and the application is to be deemed reject.
Once the concession is granted, games and betting operations may
begin. However, prior to commencing the related activities, the operator
is required to conclude, also through the Internet, a game account
contract with each player. The guidelines of such a contract are set forth
b) each player may enter into only one agreement;
Finally, Article 24 para. 24 of Law 88/09 provides that AAMS may
revoke or suspend a concession or impose monetary fines upon the
breach of its provisions.
V.
New Authorizations
On 7 June 2012, AAMS adopted new rules whereby the holders of
concessions granted under Law 88/09 may apply for an authorization to
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provide skill games, fixed odds games of chance and card games that
are not organized as a tournament.
on a yearly basis for the purpose of the ongoing validity of the
authorization. The scope of the audit is to verify that:
The legal ground of such an authorization is that the applicant already
holds a concession and is interested in providing additional games and
gambling services that are not included the concession.
a) the hardware and software and the RNG components comply
with EVA’s most recent certification;
b) the service complies with the certification guidelines;
The application may be for a new game platform or for utilization of an
authorized game platform for additional games.
In both cases the applicant must file an application with AAMS
containing, inter alia, technical information regarding the new platform
or any modifications to the one that has already been authorized and
the games the application refers to, in addition to documents and
information pertaining to the concession and the concession holder.
After all of the required documents and information are filed and the
application is complete, AAMS shall examine the documents as well as
the remote access and operability of the game sessions and game
accounts. Upon the positive outcome, AAMS shall authorize the new
platform or the new games. It is important to note that a new
authorization is required not only to offer new games, but also to
change or modify the hardware or any software components of the
random number generator or of any components involved in generating
number combinations.
Subsequent the issuance of the authorization, an independent agency
(Ente di Verifica Abilitato – “EVA”) must audit the platforms and games
c) the information made available to online players regarding each
game’s jackpot for the previous 12 months is correct.
The concession holder must apply for the audit with EVA within the
deadline indicated by AAMS and, after the audit is copleted, submit
EVA’s audit certificate to AAMS with a report on the each game’s jackpot
for the previous 12 months. AAMS shall assess the documentation and
inform the concession holder of authorization whose validity is
confirmed until the following term of expiration. Authorizations shall
loose effect if the above documents are not submitted to AAMS within
the prescribed deadlines and AAMS shall suspend all gaming activities
through it central system.
VI.
Unauthorized Games and Gambling
The rigid framework on games and betting, whether or not online, is
aimed at preventing unlawful gambling activities and the hindrance of
public policy; the unlawful exercise of games and gambling activities is
punished under Article 4 of Law 401/89.
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DISCLAIMER
Precisely, Article 4 para. 1 of Law 401/89 punishes:
 the unlawful exercise of State monopoly lotteries, betting and
prediction games;
 the unlawful gambling on CONI sports events and State
monopoly horse racing events;
 the unlawful gambling on other sports or other events or skill
games.
The applicable sanction ranges from a minimum of 3 months to a
maximum of 3 years imprisonment or a monetary fine in an amount
ranging from a minimum of € 500 to a maximum of € 5.000.
The same sanction applies to unauthorized betting activities performed
on behalf of third party. Therefore, local agencies that operate on behalf
of foreign bookmakers must be duly authorized.
In addition to a concession or authorization, a licensed issued in
accordance to Article 88 of the TULPS is required for the lawful exercise
of gambling activities. Not only the concession holder but also the
affiliate that gathers bets on behalf of the latter must have a license.
The foregoing is an overview of the rules governing online games and
gambling in Italy. Given the continuous expansion of new games and
technology, the applicable rules and regulations are likely to change in
consideration of the ongoing development.
The information and commentary herein do not and are not intended to
amount to legal advice to any person on a specific matter. They are
furnished for information purposes only and free of charge. Every
reasonable effort is made to make them accurate and up to date but no
responsibility for their accuracy or correctness or for any consequences
of reliance on them is assumed by the firm. Readers are firmly advised
to obtain specific legal advice about any matter affecting them and are
welcome to speak to their usual contact.
ABOUT PG LEGAL
PG Legal is a dynamic, entrepreneurial-minded Italian law firm that
provides legal and consulting services to Italian and international
corporations in a wide range of sectors, including the steel industry,
commodities trading, insurance, banking, finance, renewable energy
and gas, shipping and yachting, online games and betting.
***
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For any queries you may have, please find below our contact details:
Angela Rinaldi
Partner
E: [email protected]
Offices:
Rome Office
11, Via Lisbona
00198 Rome
T.: +39 06 884 1535
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3, Via Sant’Andrea
20121 Milan
T.: +39 02 760 13359
Also in Naples and Genoa
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