RGA Suggests Changes To Italian Tax Regime

The Remote Gambling Association (RGA) commissioned a report on the current gambling tax regime in Italy, and concluded that a better system would be the adoption of Gross Profit Tax on sports betting.

The KMPG study found that the current tax on stakes used by the Italian government (also known as turnover tax), is worse value for consumers and leads to loss of income for the government. In addition, the report found that Italian gamblers would be better protected by tax for sports betting based on Gross Profits Tax.

One of the most glaring results of the current tax regime, according to the RGA, is that more and more sports bettors based in Italy are opting to take their gambling to off-shore operators.

The report stated: "We expect the increase in price which accompanies a turnover tax to have two effects on Italian remote gambling on sports: To reduce the demand for gambling overall; and to incentivise Italian nationals gambling online to switch their gambling activity from onshore duty paid providers to lower priced duty avoiding offshore providers."

Offshore Gambling Worth €11 billion

The size of the offshore market for sports betting Italians was estimated to be around €11 billion, according to the Italian gambling operator, AAMS.

The RGA suggested Italian tax changes and said that a more consumer-friendly gross profits tax of up to 16.5% would raise the same tax revenues as the turnover tax now used by the government, but at the same time would recapture large parts of the markets as operators would be able to offer better odds due to lower duty.

"A move towards a gross profit tax for Italian sports betting would also accord with the current trend around Europe with what Italy levies on other gambling products," read the report.

Italian Tax Regime "Uncompetitive Tax Burden"

The Chief Executive Officer of the Remote Gambling Association, Clive Hawkswood, said that the current turnover tax for online sports betting essentially creates "a huge and uncompetitive financial burden for consumers and licensees."

"In contrast, an affordable rate of GPT will see more Italians bet with operators who are licensed in Italy," he said. "As the KPMG report clearly demonstrates, this is achievable in a way that will safeguard existing tax revenues and enable Italy to benefit from the future growth in the market."

"Against that background, we will be asking the Italian government to change its current tax basis for sports betting from turnover to gross profits."