by Renee Israel
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
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
"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."