Law changes help Italy’s e-gaming sector


Law changes help Italy’s e-gaming sector

globalbettinggamingconsultantsIs Italy’s e-gaming rising from ‘zero to hero’ and becoming one of the success stories of regulation? Has Aams been able to quash its reputation for a draconian approach to regulation through enlightenment? Prior to the regulatory changes the Italian market was seen as a disproportionately ‘protectionist system’ within the EU.

Stefano Sbordoni, IT Law Professor and Lawyer at Studio Sbordoni, commented on the new regulatory era in Italy “We are all aware that legal changes in Italy have been beneficial to the whole European space, especially relating to online regulations. As far as terrestrial gaming is concerned, I foresee a silent revolution that in the medium period will lead to a dramatic change in the business model, in Italy and abroad. Right now, there is an overdue but at the same time excessive attention of Regulators and States only to the negative aspects of gaming, and this is certainly counterproductive for both them and the operators.”

Sbordoni added “I feel that the regulations are well done, and will bring revenue to the industry. The online gaming industry needs continuous updates and refreshments, independent of the economic result.”

The regulation is now extending the product portfolio it covers and this is beneficial for many, although there may be some questions about the benefits to local operations. Gionata La Torre, CEO of Evolution Italy, commented: “With the deregulation of Bingo and the introduction of slots on line, Italy will have a complete igaming portfolio. This will help Aams and licensed operators fight against the dotcoms because the player can experience the whole gaming suite on IT portals.” Gionata added “it has been clear since the beginning that online slots would have followed the launch of casino games (both RNG and live). [Regarding] local operators versus European firms, at least in casino games Italian companies are winning. Among the top 5 companies, 4 are Italians with Lottomatica (that we proudly serve) emerging as clear leader.”

Amongst those interested in the market is also said to be 32Red Plc, the Gibraltar based online gambling operator. Their statement dated 5 September 2012 confirmed that their “revenues for July and August 2012 are up 22% on the corresponding period in 2011 despite the Olympics taking place at that time.” Concerning the Italian market 32Red declared that “The Board continues its strategy of investing in UK marketing and will commence marketing activity in Italy during the second half of the year.” Ed Ware, CEO at 32Red Plc, commented: “As previously stated, we intend to enter the Italian online casino market in early Q4 [2012] and we are looking forward to commencing marketing and operational activities. While we continue to focus on our core market of the UK, we look forward to utilising our Italian licence to expand the profile of the brand and to grow the business in another regulated market.”

Italy seems to have revived the live casino market and Evolution Gaming is undoubtedly enjoying this moment as it has been chosen to supply their offerings to a number of well known brands. Notably, Betsson has chosen Evolution Gaming for its live operations. In Evolution Gaming’s press release dated 5 July 2012, “Commenting on StarCasino’s Italian Live Casino strategy Fabio Bufalini, General Manager, Italy of Betsson Group, said: “Betsson Group has already achieved international success with Evolution Live Casino. In Italy we were also aware of Evolution’s localised solutions and their dedicated tables, which we see as the way forward in this market. Evolution was therefore the natural choice as StarCasino’s Live Casino partner for Italy.”

Also Unibet is said to have chosen Evolution Gaming. According to reviewed-casinos.com Unibet is launching their live casino operation with Evolution Gaming in Italy and Daniel Eskola, head of gaming at Unibet commented: “We already work closely with Evolution on unibet.com, streaming Live Casino games to customers’ PCs globally – and we’ve been extremely pleased with the results. Now, with Evolution Live Casino becoming the first Live Casino solution to be fully certified by Aams, we are very excited about offering an enhanced local service for our Italian customers through unibet.it.” Jens von Bahr, CEO at Evolution Gaming, added: “Re-regulation of individual markets across Europe presents both challenges and huge opportunity. Italy is a complex market in terms of regulatory requirements, so we are naturally delighted to have helped Unibet go live so quickly with such a complete Live Casino service for Italian players.”

The Italian market has posed significant tests for the industry. Some of the difficulties arise from the technical particularities of the legislation. Development of new games represents a burden of extra compliance. Similarly, even the paramount importance of customer acquisition needs extra care. Gionata La Torre explained that “probably the main challenge has been the evangelization on a new type of gaming offer. Though we are trading since 2006, live games were not a popular subject in Italy. Regarding our competitive advantage, being first mover helps a lot in a tight regulated market.” Gionata further commented “probably the main challenge is the certification for every new game, and certification of the integration for every new customer. We’ve now a very structured process and certifying a new Customer is pretty fast and smooth. Italy is at the forefront of the .country model and all the other main European markets are looking to it, as it is US. If you make it in Italy, you can make it everywhere.”

Addressing the issue of proportionality and discriminatory measures in terms of European Court of Justice’s (‘ECJ’) rulings, and particularly the views from the European Commission (‘EC’) that found the former Italian rules disproportionate, Giulio Coraggio, Senior Associate at DLA Piper believes that “this is a tricky issue. The arguments raised by the European Commission might have been correct under the old Italian rules that for instance required the license holder to be based and have its technical infrastructures in Italy. However, the new Italian gambling rules allow license holders to be based in any EEA country and have its technical infrastructure located therein adopting an approach that is more in line with EU principles. Additionally, Aams has been recently trying more and more to balance gambling operators’ needs with the objective to protect citizens through player protection measures and stringent checks on operators.”

The regime is now considered more proportionate which is clear from the industry response. The market requirements in this specific sector seem to have been listened to. Stefano Sbordoni commented “Actually, the infringement proceedings of 2006 were mostly due to a mistake in the issuing of that regulations, that was issued again a few months later without incurring any infringement proceedings. The essence of the provision of banning illegal websites in fact has not caused problems to the Italian regulator and to the State. In my view the rules are not disproportionate: its effectiveness though is more on the communication side than on the legal. Technology nowadays allows the use of devices that can help to bypass this obstacle, but the ratio of the legal rule is solid.”

The discussions about the Italian rules, however, go further. The breach of EU laws is another interesting topic. It was only in July when Stanleybet lodged a complaint with the European Commission that Italy was applying ‘unlawful gambling regulation’ despite three ECJ rulings declaring the Italian gambling regime in breach of EU Treaty [Stanleybet press release 25 July 2012].