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Gambling in Italy

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Roughly speaking, it can be said that gambling is in Italy a state-reserved activity that can be legally carried out

– in four land-based casinos; these are allowed under special, stand-alone legislative acts, and have to be understood as an exception to a general prohibition of casinotype games, set by the Criminal Code;

– through lotto, various lotteries, bingo and a number of sports betting games, that are operated either by the State itself or by a number of public or private entities (Mancini, Charter 38, Internet Gambling Report V, 2002, at 574 s.; cf. Del Ninno, Online Gambling in the European Union: A Compared Analysis of the Current Legal Framework in Some EU Member States, Gaming Law Review, Number 5, 2002, at 417 s.), through the instrument of “concessions” (concessioni) or “authorisations” (autorizzazioni) (see Para. 1.2. for the definition of these notions).

General Approach to Gambling

General approach to gambling in Italy may be best understood under a historical perspective, which will be illustrated first (1.1.). An overview of the key entities and operators involved in the market will then follow (1.2.).

Historical Development

Art. 88 of the T.U.L.P.S. (“Testo Unico delle Leggi di Pubblica Sicurezza”, or “Public Security Act”), issued by royal decree of 18 September 1931, n. 773, provided, in its original version, that no concession could be granted for the operation of betting, with the only exceptions of horse-races betting, boat races, football games and the like, if the “allowing of betting represents a precondition for the proper operation of the sports event”.

The fundamental D.Lgs. 14 April of 1948 n. 496 was subsequently enacted, which started to mitigate the rigidity of the monopoly and to enlarge the possibility to resort to concessionaires.

– The organisation and the operation of games of skill and sports betting were always reserved to the State (Ministry of Finance), which was however allowed to operate the activity directly or indirectly through the intermediary of physical or moral persons giving appropriate guarantees of stability and fitness.

– In addition, operation of betting on horse races and sports betting was directly reserved to respectively U.N.I.R.E. (the public entity entrusted with the protection of horses and the enhancement of equine races) and C.O.N.I (the Italian National Olympic Committee), whenever they were related to sports events organised or operated under the control of these entities.

In order to combat the increase of fraud in sport competitions and the spreading of illegal gambling, the law of 13 December 1989 was then passed, which punishes the illegal operation of bets. Particularly, art. 4 of Law No 401/89 punishes the following:

– Non-authorised operation of lotto, games and bets reserved to the State or other concessionaires;

– Non-authorised operation of bets on sports events run by C.O.N.I. or U.N.I.R.E;

– Non-authorised operation of other public bets on other competitions between persons, animals and other games of skill;

– Selling on the national territory of lottery tickets and the like operated by foreign States;

– Participation at the operation of the above through taking of bets and paying off of the winnings and promotion of activities with any means.

– Mere participation at bets and games when illegally operated.

According to the constant case-law of the Court of cassation, the operation of any public bets on sports events is always subject to the police licence mentioned in Art. 88 of T.U.L.P.S. As a result, any operation of public bets on sports event is illegal, even if this exercise takes place in the Italian territory on behalf of foreign operators.

In the following years, the legislation further evolved. With the law of 28 December 1995, n. 549 (“measures of rationalisation of the public finance”), the following was determined:

– the taking of bets of lotto and sports bets has to be done directly in the outlets expressly authorised, no intermediation being admitted (Art. 3, co. 228);

– C.O.N.I has the power of entrusting the operation of the bets to physical persons, companies or other entities that offer appropriate guarantees. Some amounts of the total revenues, at the net of taxes and expenditures, are destined to the C.O.N.I.

C.O.N.I. has in turn to devolve a certain amount of these proceeds to the favouring of the sports activities, through interventions destined to sports infrastructures, as well as the development of the sport activities for young people.

The Regulation passed on the basis of this legislation (D.M. n. 174 of 2 June 1998) establishes that:

– C.O.N.I. may attribute, through tender procedure to take place according to the national and community legislation, the concessions for the operation of sports betting at the national totalisator and at a fixed odds to physical persons, companies and other entities with appropriate requirements, also financial, taking into account the transparency of the ownership, provided that the concessionaire is set up in the form of a capital company and a rational distribution on the territory of the bettaking outlets is ensured.

– In order to ensure the transparency of the ownership of the concessionnaire, it is established that, if the concessionaire is set up in the form of a capital company, the shares having voting rights are to be transferred to physical persons or persons companies (“società di persone”: “società in nome collettivo” or “in accomandita semplice”) and limitations to their transfers are set forth. Any form of intermediation is prohibited and the bets have to be made exclusively at the bet-taking points expressly authorised by the C.O.N.I. and by the police.

The same system was set up by art. 3(78) of law 23 December 1996, n. 662 (measures or rationalisation of public finance) for the operation of bets relating to horse races. The Regulation implementing this legislation (D.P.R. 8 April 1998, n. 169) sets out the possibility for the Ministry of Finance, in concert with the Ministry for Agriculture, to award a concession for the operation of the bets on horse-racing to physical or legal persons at the same conditions as the ones set above.

Law N. 388, of 23 December 2000 introduced some further innovations:

– Art. 88 of the Public Security Act is amended. The new text is based on the fact that the concession to private entities is no longer the exception. The need to get a police licence is rephrased as a general clause, rather than as an exception to a prohibition. The new text reads: “licence for the operation of the bets may be awarded exclusively to concessionaires or entities authorised by the Ministries or other entities to which the law reserves the power to organise and operate the bets, as well as to entities charged by the concessionaire or by the holder of the authorisation by virtue of the same concession or authorisation”. What was already beyond doubt has been made more explicit: private entities wishing to exercise an activity of public betting have to be provided with both the police licence and a concession.

– Art. 37 of Law N. 388 of 2000 introduces in the Art. 4 of law 401/1989 two paragraphs:

– a para. 4-bis, according to which the criminal sanctions set out in the preceding paragraphs are applied to whoever, devoid of concession, authorisation or permit of public security in the sense of art. 88 TULPS operates an organised activity designed to accept or take, even if by phone or internet, bets of any kind operated from Italy or abroad;

– a para. 3-ter, which applies the same sanction to whoever carries out the taking or reservations of lotto bets, sports betting or bets by phone or internet, if it does not hold the appropriate authorisation to the use of these means. It is then clarified that, for the operation of the public bets by phone or internet, it is necessary to have, apart from the concession and the authorisation of the police, also a specific authorisation of the Ministry of communication in relation to the means which are utilised.

In the meantime, the Law Decree 8 July 2002, n. 138, turned into law of 8 August 2002, n. 178, established the unification of the competences in the hands of A.A.M.S., to which are awarded all functions in matters relating to organisation and regulation of games, bets and sports betting, notwithstanding the reserve in favour of CONI set out in Art. 6 of the law 496 of 1948.

Financial Act of 2003 (n. 289 of 27 December 2002) which, with art. 22 (8 et seq.) governs the transfer of the concessions, taking into account the suitability of the premises and the rational distribution of the same in the territory and expressly establishes that companies may take part in the procedure of award of those concessions.

According to a parliamentary inquiry “on the sector of the games and of the betting”, whose Report has been approved in March 2003, (Doc. XVII n. 10 (Documento approvato dalla 6a Commissione Permanente a conclusione dell’ indagine conoscitiva sul settore dei giochi e delle scommesse).) though the organisation of the games, bets and sports betting by the State results in the increase of its financial resources, “it is considered that these financial needs find a rigorous limitation in the carrying out of the tasks of protection of the public order and of the health of the citizens, that may be endangered by uncontrolled and unregulated games and bets, as well as to combat illegal and clandestine phenomena. The moral implications involved in the public action in the gaming sector have also been taken into account: an attitude of open support of game, that may turn the public action in an open favouring of conducts socially sanctioned by current morals, is full of risks”. It then concluded that “the Commission deems essential to underline, as a starting point, the full legal, political, moral regulatory justification of the State intervention, whose extent, also in terms of supervision, cannot find any limitation in a misunderstood economical hyper-liberalism, though the contribution to the national economy and particularly to the public finance of the whole gaming sector, extensively understood, is considerable”.

In May 2005, a new important amendment of Law 13 December 1989 No. 401 was added (Art. 7 of Law No. 80 of 14 May 2005) has made clear the criminal-law sanction applicable to the promotion, in Italy, of gaming, betting or lotteries not expressly authorised by the State, referred to under article 4, paragraph 2, of Law no. 401 of 13 December 1989, shall extend “to whomever, in any way, publicises in Italy gaming, betting and lotteries accepted by anyone abroad”. This was done, in the words of A.A.M.S., “in the interests of promoting venues of legal gambling while contrasting illicit forms of gaming, with a particular focus on safeguarding minors and categories of individuals at risk”, since “the priority objective of the system implemented in Italy is the safeguarding of the citizen-player”. In September 2005, the potential of online gambling was finally fully taken into account by the legislator. In Law-Decree 30 September 2005 n. 203 converted into Law No. 248 of 2005 it was provided that A.A.M.S. shall define with its own measures by and no later than 30 April 2006 the rules for the taking of sports bet, lotto and enalotto and horse races through Internet, digital, terrestrial and satellite TV and fixed and mobile telephony.

These measures shall provide for the valorisation, also in order to protect public policy and the players, of the present networks, provide for the extension of the object of the concessions to the taking of stakes through the above mentioned channels as well as for the commercialisation of the means of payment. In order to combat the illegal gaming, each concessionaire should open three outlets additional to those where bets are already operated but situated in the same region, which should be activated by 31 March 2006.

Priority shall be given to municipalities having a population exceeding 15.000 inhabitants, which are actually not served by bet agencies.

Important provisions aiming to combat the growth of illegal gambling were finally enacted at the end of 2005 by the Financial Act (“Legge finanziaria”) for 2006.

According to these provisions, A.A.M.S. shall inform the internet access providers and the providers of other communication networks of any situation where, through these networks, offer is made of games, bets and so on, in the absence of concession or licence or otherwise in violation of the law provisions or of the limits or prescriptions established by A.A.M.S. These providers are under a duty to prohibit the use of the networks by the relevant non-authorised operator by adopting any appropriate technical measures as prescribed by A.A.M.S. In case of violation of these obligations, an administrative sanction of 30.000 to 180.000 Euro for every single violation applies. The competent authority is A.A.M.S. New sanctions were established for illegal commercialisation or use of the entertainment and games machines of Art. 110 of the T.U.L.P.S.

These new rules have been implemented and specified by an important decree of A.A.M.S. (“Decreto direttoriale”) on 7 February 2006, effective as of 24 February 2006 (See Press Communication by A.A.M.S. of 13 February 2006, published on the website of AAMS). In the “whereas” of the decree, it is said among other things that: a) “it is necessary and urgent to prohibit the illegal taking of games and bets by operators having no authorisation to do so or by those who, while having an authorisation, take the bets and other games in Italy but transfer the stakes abroad”; b) “taking of bets and games which are not subject to the provisions set forth by Italian legal order” are prohibited in that “they cause missed gains for the State”; c) “the combat of illegal game is one of the primary objectives of the Italian legislator and government and as such of A.A.M.S., also to the end of protecting the players and the authorised game operators as well as to safeguard the revenues for the State”. The providers of internet access or access to other telecommunication networks have a duty to prohibit any access to those operators whose name is supplied by A.A.M.S., to inform A.A.M.S. of any such activity they may know as well as to supply any information to identify such non-authorised operators. In case of non-compliance with these duties, civil liability towards third parties may arise and an administrative sanction of 30.000 up to 180.000 Euro for each single violation may be imposed by A.A.M.S.

To defend the legitimacy of this most recent legislative measure, A.A.M.S. stressed once more that “the decree prohibiting the access to non-authorised bookmakers represent, among other things, a protection of those players who, by connecting themselves with non-authorised providers, risk of being the victim of frauds and of suffering considerable financial prejudice” (See Press Communication by A.A.M.S. of 16 February 2006, published on the website of AAMS www.aams.it. Please note that the legal proceedings to which this most recent measure has been giving rise as of March 2006 and most notably during May 2006, i.e. after the holding of the stakeholders meeting organised by the Institute in Geneva on 8 May 2006 as per the Terms of Reference, could unfortunately not be given account of in the present Report.).

A.A.M.S. and the the main operators in the gambling market

The underlying principles of the activity of A.A.M.S. are, in the words of A.A.M.S. itself, the “protection of public order, of public faith and of the players; the adoption of preventative measures against problematic gambling; the combatting of illegal gambling, not only with the aid of repressive activities, but also and above all with a proactive policy of constant improvement of the offer of public games. The action of A.A.M.S. aims at ensuring to make easily accessible the ludic moment in a context which is heavily regulated, technolocally updated and constantly supervised, while ensuring at the same time the optimisation of the fiscal revenues” (See « Osservatorio Internazionale Giochi Profilo Paese Italia, Maggio 2006 » delivered to the Institute by A.A.M.S., p. 5.).
In administering the supply of gaming to the public, A.A.M.S. operates either through the granting of concessions (“concessioni”) to third parties or through direct management. Where the management is indirect, the A.A.M.S. assigns the gaming activities to private companies or public entities through specific administrative acts, namely concessions (concessioni) or authorisations (autorizzazioni).

“Concessions” (concessioni)

In assigning the management of games to private companies or public entities, the instrument of the public tender is used. The relationship established between the public party and the concessionaire is regulated by an administrative licensing act that leads to a concession agreement: a negotiated act regulating the rights and obligations of the parties to the contract. The concession agreement entails not only the transfer of public powers to the concessionaire, but often (different types of “concessions” exist within the national system) the transfer to the concessionaire of the responsibility for managing activities which are prerogatives of the State. Concessionaires that accept the risks of managing the activities are granted receipt of the profits from the activities carried out for a given period of time.

Authorisations (autorizzazioni)

As a rule, authorisations are administrative acts issued with regard to an activity, otherwise unrestricted, that is recognised as being of a public interest nature: for this reason, the law requires that it be subject to the supervision of the relevant administrative authority. In the field of gaming, this interest is generally public order; as regards the objective context of the act of authorisation, it covers both the gaming activities and other aspects, such as the facilities where the activities shall be held. The main operators currently active in the gaming sector are:

– Lottomatica s.p.a, holder of an exclusive concession for the Lotto game and the traditional and instant lottery games (under a temporary grouping of enterprises through the National Lottery Consortium), and together with other private operators for “concorsi pronostici” (see “Definitions” below) and bets, plus gaming machines with prizes in money (“AWP”);

– Sisal s.p.a., exclusive concessionaire for the Superenalotto, and in collaboration with other operators for concorsi pronostici and bets, plus gaming machines with prizes in money (AWP);

– Snai Group, non-exclusive concessionaire for concorsi pronostici and bets, plus gaming machines with prizes in money (AWP); this group also operates on the betting market as a supplier of services to concessionnaires.

Other concessionaires include:

– horse racing and sports betting agencies; each agency holds a concessione, and a single subject may possess more than one concession;

– 334 concessionaires for Bingo;

– 10 concessionaires for the activation and operation of the network for telematic management of gaming through gaming machines offering prizes in money (New Slot), including Lottomatica, Sisal and Snai.

The concessionaires, in turn, develop the gaming supply through a bet-taking network made up of private subjects (tobacco shops, snack bars, agencies etc. …) that have reached agreements with one or more concessionaires or service providers. The bettaking network, which consists of approximately 45,000 collection points, is structured as follows:

– Lottomatica: approximately 30,000 sales points

– Sisal: approximately 20,000 sales points

– Snai: approximately 900 sales points

– Horse racing and sports betting concessionaires: approximately 1,600 agencies

– Bingo: approximately 304 halls

– Gaming machines:

– AWP: approximately 170,000 devices in approximately 65,000 locations

– Pure entertainment devices (without money winnings): approximately 240,000.

A.A.M.S. has no competence with respect to the following:

– Casinos, which are placed under the management of local government bodies (provinces and municipalities), based on the legislative acts that established each casino and under the control of the Ministry of Internal Affairs (see below under Point III.3).

– Local events (traditional “tombola” bingo games, drawings and lotteries) offering prizes for a total value of no more than €. 51,645 in connection with local festivities, which only require notification to the local authorities and to AAMS.

– Prize competitions connected with promotional sales.

Definitions

  • A.A.M.S.: “Amministrazione Autonoma dei Monopoli di Stato”, the state body entrusted with the operation and management of the gaming sector (with the exceptions indicated above) Authorisation: see the text contained in Point 1.2 above
  • AWP: Gambing machines with prize in money
  • Bingo: based on the drawing of 90 numbers, this game derives from the Lotto and is very similar to the traditional “tombola” which has always enjoyed much popularity with the Italian families
  • Casinos: the “places destined to games of chance, also private, and also if the game is under any form hidden” (Art. 721 of the Criminal Code).
  • Concessionnaire: the holder of a “concession”
  • “Concorsi pronostici”: betting contests based on the scores of football games (Totocalcio and Totogol) and of horse races results (Totip)
  • C.O.N.I: (“Comitato Olimpico Nazionale”), the Italian National Olympic Committee
  • Decree by A.A.M.S.: a decree issued by A.A.M.S. in the context of its institutional regulatory powers; it takes the form of a “Directorial Decree”, “Decreto Direttoriale”.
  • D.Lgs.: “Decreto Legislativo”, “legislative decree” issued by the Governement on the basis of a delegation by the Parliament
  • D.M.: “Decreto Ministeriale”, “decree” issued by a Ministry and belonging to secondary legislation
  • D.P.R.: “Decreto del Presidente della Repubblica” Decree issued by the President of the Republic”, which usually incorporates a “Regulation” (“Regolamento”) issued by the Governement in the context of its legislative powers (it belongs to the secondary legislation)
  • Gambling: for the purpose of this study, this term shall be intended as a synonym for Game of chance
  • Games of chance: those games where the aim is profit and winning or losing is entirely or almost entirely dependent on chance (Art. 721 of the Criminal Code)
  • Instant Lotteries: lotteries with instant selection (“scratch and win”)
  • L. – Law: parliamentary act being the typical primary-legislation legislative measure
  • Law-Decree: “Decreto-legge”, a primary-legislation measure issued by the Government in urgent circumstances; it nees being “converted” into a parliamentary law within 60 days of its issuance otherwise it lose effect
  • License: for the purposes of this Study, this term essentially refers to the “Police license” which is defined herebelow; it has to be distinguished from the “Concession” which has been defined above, in Point 1.2.
  • Lotto: traditional game based on the use of number from 1 to 90
  • Police license: the license granted by the police which is necessary for the concessionaires and other authorised entities to operate bets according to art. 88 of the T.U.L.P.S.
  • Public Security Act: see “T.U.L.P.S.”
  • Superenalotto: former Enalotto, a game linked to the Lotto drawings
  • Traditional Lotteries: those lotteries which are linked to one or more historical, artistic, cultural or other local events and whose drawing is differed
  • T.U.L.P.S. “Testo Unico delle Leggi di Pubblica Sicurezza”, or “Public Security Act”, issued by “Regio decreto” 18 September 1931, n. 773;
  • U.N.I.R.E.: “Unione Nazionale Incremento Razze Equine”, the public entity entrusted with the protection of horses and the enhancement of equine races

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