Italy intends to impose a tax on gambling to combat Corona.
Facing the challenges posed by the coronavirus crisis, the Italian government proposes to establish a rescue fund for the Serie A soccer league. To accomplish this, they plan to impose a new betting tax, using 0.75% of the income from sports betting. This move has sparked backlash from operators, who fear an increase in the black market. Let's look at how this may develop.
This year, Italy's legal sports betting industry gained a charmingly mind-boggling €14 billion in income. The high revenue could substantially contribute to the rescue fund, which the government hopes to fund with at least €100 million annually. However, this plan has ignited strong objections from licensed bookmakers. They're already feeling the devastating effects of the standstill in top-level sports. They argue that additional taxation jeopardizes the "legal sports betting" business.
The pandemic has greatly impacted both sports and gambling sectors in Italy. Global betting turnover declined by a staggering 90% due to cancellations and postponements. Land-based and online bookmakers have both taken a significant hit, resulting in millions of euros in losses.
Legal betting operators are already shouldering a significant tax burden. In early 2019, land-based operators experienced a raise in their tax from 18% to 20% on the gross gaming revenue (GGR). The objective was to bring the country's budget deficit down from 2.4% to 2.04% by 2021. Simultaneously, the tax rate for regulated online sports betting increased from 22% to 24%. Needless to say, there were protests. Operators argued they were "significantly affected" by the additional costs. For instance, one of them, Snaitech owner Playtech, forcasted that their adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2019 might decrease by around €25 million.
The long-term implications of the virus outbreak on the industry are uncertain at this point, but it's evident that Italian bookmakers are currently suffering considerable losses. In just two months, online sports betting revenues for the top 18 bookmakers fell from €80 million in February to €45.6 million in March, indicating revenues are almost halved compared to last year. The retail segment was even more affected, with a 74% decrease from €98.6 million in February to €25.9 million in March. The market is expecting further "dramatic" declines in the next few months.
Even as bookmakers ask for a tax break, the government is scrambling to save the sport. They're particularly concerned for Serie A, which stands to lose over €700 million if the championship doesn't happen. Serie A had demanded a financial boost from the government beforehand. Gabriele Gravina, President of the Italian Football Federation (FIGC), explained, "Football must come out of this complicated situation cleanly." Giuseppe Conte, the Prime Minister, announced that the championship would continue from the end of May. Still, no concrete agreement has been made. Vincenzo Spadafora, the Sports Minister, has said that he doesn't want to set a timeline for now.
In an effort to resume match operations as soon as possible, even with ghost games, Serie A is collaborating with politicians for extensive player tests. They've also put forward proposals to counteract the virus' long-term effects, such as lifting the ban on betting advertising and sponsorship – imposed in 2019. Serie A believes that this move could generate millions in revenue and promote quick cash flow. However, lifting the advertising ban is only one of many potential solutions under consideration right now. As of now, the roller coaster ride of these developments continues.
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Source: www.onlinecasinosdeutschland.com
