Italy’s gambling tax hikes to do damage to Playtech’s earnings

Italy’s Senate approved new gambling tax hikes on Sunday, putting the new rates on track to become law later this week.

On Sunday, Italy’s Senate approved an amended version of the coalition government’s new budget by a vote of 167-78 (with three abstentions). The amended budget was delivered to the Chamber of Deputies on Monday and will be reviewed by the Budget Committee on Thursday (27) before the full Chamber puts it to a vote on Friday.

The government threw the local gambling industry for a loop last week when it abruptly introduced plans to hike tax rates on online casino revenue (was 20%, now 25%), sports betting (was 22%, now 24%) and virtual betting (was 20%, now 22%) as of January 1, 2019. Land-based sports betting wasn’t spared (was 18%, now 20%).

Land-based gaming machines also saw steeper tax hikes than the government originally promised, and higher even than the rates announced last Wednesday. The tax rate on amusement with prizes (AWP) machine revenue will rise by 1.35 points on Jan. 1 while minimum payout rates will fall two points to 68%. Taxes on video lottery terminals are going up 1.25 points while payouts will fall one point to 84%.