30-second summary

• Coalition Lega-5Star government steps up attack on illegal gambling
• Government has hardline stance and heavy fines are imminent
• Maximum jail sentences doubled
• New powers added to halt Mafia’s gambling racketeering

Italy’s coalition Lega-5Star government has announced its latest measures to crack down on illicit gambling in the country.

The government has a hardline stance on gambling. Last year it banned virtually all gambling-related advertising and sports sponsorships. It is now focusing its attention on so-called “bad actors” – illegal operators and Mafia-run black market activities that launder their profits.

Fines increase

Among the new measures announced by the coalition is a hefty increase in fines for gambling operators who violate Italy’s strict gambling laws.

At the lower end, there will be a penalty of €20,000 ($23,000; ￡17,528) for each illegal, unlicensed, or unregistered gaming machine in any betting store or amusement arcade.

Fines of €50,000 ($57,000; ￡43,819) will be levied on any gambling operator found to have engaged in criminal activities. These fines could be unlimited because they apply to each violation of the updated regulations.

Jail sentences for illegal gambling are also going to rise steeply. Anyone found guilty of illegal gambling activities, digital or land-based, can expect to receive a prison term of between three and six years. Previously, sentences ranged from six months to three years.

Mafia controls

The Mafia has been greatly weakened in Italy in the last two decades, but its tentacles still reach into illegal activities, including gambling and money-laundering.

A police investigation in 2018 uncovered a shocking Mafia racket worth more than €4.5bn ($5.15bn.; ￡3.94bn). A network stretching across southern Italy was running illegal gambling sites, money laundering, and linked tax evasion.

As a result, the government is investing the police and courts with stronger powers to prosecute licensed bookmakers caught laundering Mafia money. The ministry of finance is to work with the anti-Mafia parliamentary committee on a new unit to monitor illegal gambling.

Despite this, the Italian gambling regulator, the ADM, appears to have been frozen out of the crackdown, possibly because its licensing systems are under governmental review.

Taxation goes up

Taxes on legal gambling will rise, following the Senate’s approval of the coalition’s new Budget Law. Gross gaming revenues on all sports betting will increase by 2%: retail betting will be 20%, betting on virtual events 22%, and online sportsbook duty 24%.

Turnover tax for arcade machines and video games will go up from 1.25% to 1.35%. Gross gaming revenue on bingo and online skills-based games will rise to 25% from 20%. Licensed casino operators are also facing a tax hike to 25% from 20%.

Deputy prime minister Luigi Di Maio reportedly said that the coalition government had made Italy’s gambling industry “the most taxed in Europe.”

The tax increases are expected to add €50m ($57m; ￡57.2m) a year to the government coffers as it tries desperately to balance its books, stave off a recession, and cut the national deficit to 2.04% of its GDP.