Italian Gaming Market Update: The Italian Communications Authority raises strong doubts about the applicability of the Dignity Decree

NEWS

20 Aug 2019

The Italian Communications Authority “AGCOM” (Autorità per le Garanzie nelle Comunicazioni) has raised strong doubts about the applicability of the infamous Decree Law 12 July 2018, n. 87, containing 'Urgent provisions for the dignity of workers and businesses', amended by  Law 9 August 2018, n. 96, the so-called “Dignity Decree”.

The Dignity Decree provided for a ‘generalized ban on advertising, sponsorship and all other forms of communications with promotional content relating to games or bets with cash prizes’.

On the 24 of July 2019, the AGCOM issued a detailed “Report to the Government” in which it criticized the regulation introduced by the Dignity Decree. In particular it describes the decree as being in "dissonance with European principles" specifically the principle of proportionality, referred to by the European Court of Justice and European directives. A warning that raises not only a few questions on the application of the current legislation and its compatibility with the European principles of freedom of establishment and services, but also concerns on the possible violation of the Italian Constitution (art. 41).

In particular, the Authority underlines ‘The European reference framework’ and its ‘principles of proportionality and non-discrimination which also rule the sector in question’.

In this regard it refers specifically to Directive 2018/1808/EU of the European Parliament and of the Council, of November 14th, 2018 concerning audiovisual media services. The recitals to that directive state: ‘In accordance with the jurisprudence of the Court of Justice of the European Union ... it is possible to limit the freedom to provide services enshrined in the treaty for imperative reasons of general public interest, for example the achievement of a high level of consumer protection, provided that the limitations in question are justified, proportionate and necessary’.

Measures taken by a Member State to implement its national consumer protection regulation also including gambling’ advertising, should be justified, proportionate to the pursued objective and necessary under the Court's case law.

It is also important to consider that the prevention and reduction of gambling addiction is more effectively achieved by promoting legal gambling that allows the inclusion of related educational communications, rather than exclusively banning them.

Moreover, AGCOM also highlights the significant economic impact of the ban.

On this specific matter Confindustria Radio TV - the Italian association of broadcasting media – estimates a direct loss of about sixty million euros in terms of advertising revenues as a consequence of the introduction of the ban. In addition, the Italian football league Serie A has highlighted how the football industry is strongly financed by sponsorships and sale of television rights, the revenues deriving from bookmakers representing one of the main sources of income for the top division clubs of the leading five European football leagues. The expected loss for Italian football following the entry into force of the ban is estimated at around 100 million euros a year, a substantial handicap in terms of competition with other main European leagues.

AGCOM also considers that the preclusion of any form of promotional communication as stated in the latest Italian legislation could seriously affect the principle of free competition and the ease of access of the new comers into the gaming and betting market, making it harder to compete with the giants of the sector, harming the competitiveness of Italian companies in the long run. At the same time it risks penalizing Italian local operators in respect to overseas operators and illegal operators operating remotely, that continue to operate targeting the Italian market from other jurisdictions, with few effective restrictions.

Should you have any queries or require further information on the above kindly drop us an email at gaming@whpartners.eu.