Paper I-Com: 'Mature and growing sector, need for sustainable taxation'

02 December 2022 - 12:32

The data from the paper “La sfida di una fiscalità sostenibile per lo sviluppo e l'innovazione del gaming in Italia” (The challenge of a sustainable taxation for the development and innovation of gaming in Italy) prepared by the Institute for Competitiveness highlight the recovery after the pandemic. 60% of the collection is from online.

Written by Redazione

Rome - In the last fifteen years, games sector has experienced exponential growth: the collection - i.e. the sum of bets made by players - went from around €35 billion in 2006 to almost 111.2 billion in 2021, with an overall increase of 25.9 percent, compared to 2020. The concurrent stability of expense and the Treasury reports the maturity of the sector. Furthermore, the trend of consumers to move towards digital platforms is clear. The share of remote gaming, in fact, represents 60 percent of collection, 66 percent of winnings and 24 percent of expense in 2021, with an increase of 36 percent compared to the previous year. After the slowdown due to the Covid-19 pandemic, expense and tax revenue showed an increase of 19.2 percent and 16.6 percent between respectively 2020 and 2021.

These are some of the data contained in the paper entitled "La sfida di una fiscalità sostenibile per lo sviluppo e l'innovazione del gaming in Italia” (The challenge of a sustainable taxation for the development and innovation of gaming in Italy), prepared by the Institute for Competitiveness (I-Com) and presented today, December, the 1st, during a debate promoted together with International game technology (Igt), world leader in the regulated gaming sector and state concessionaire of lotteries in Italy.

The initiative has the purpose of investigating the impact that innovation and digital transformation generate on the sector, the scenarios of sustainable taxation related to new consumer habits and the consequent regulatory challenges for the institutions.
The maturity of the public gaming sector - with collection gone from around €35 billion in 2006 to almost 111.2 billion in 2021 and satellite activities involving around 150,000 people between direct and indirect employees - highlights the economic value of the sector, which continues to be a significant and stable source of tax revenue in our country.

In Europe, as in Italy, the market suffered a significant drop in revenues due to the Covid-19 pandemic, with a reduction of about 20 percent in 2020. However, in 2021 revenue of the European legal gaming market start growing again with an increase of 7.5 percent. The forecasts for 2026 indicate a stable growth trend in which, compared to 2019, revenue growth is estimated at 26.3 percent.
The study also shows the trend of consumers to increasingly prefer gaming through digital platforms. In line with the digital transition of the Italian community (also confirmed by Desi, which sees Italy moving from 25° to 19° place in the ranking of European countries), in 2021 the size of remote gaming recorded an increase higher than 36 percent, compared to the previous year both for collection, winnings and expense. This trend is also present in Europe, where we can see, more specifically, a progressive remodelling of online gaming for mobile devices, which in 2021 represent 50.5 percent of remote gaming. According to estimates, this percentage will reach 61.5 percent in 2026.

However, the trend of illegal gaming still worries. In 2020, with the closure of physical gaming venues, there was in fact an increase in illegal bets, especially through online channels. According to reports from Censis, the trend is confirmed in 2021 too, the year in which illegal gaming would have exceeded €20 billion, compared to the 18 billion reported in 2020 and already growing of 50 percent compared to the previous year. The demand for games, the paper recalls, is also influenced by price changes in a more than proportional relationship: price increases linked to restrictive measures can lead to tax cuts that are more than proportional to the reduction in demand and contribute to a shift in consumers to illegal gambling.

"In the light of what emerged from the study", the director of the I-Com Innovation area Eleonora Mazzoni who oversaw the research, says "the issue of sustainable taxation is closely linked to the need to protect public health and support legality. In this perspective, it is necessary to bring the issue of launching a shared regulation back to the center of the discussion, through the issuing of a single text at national level, capable of systemizing the regulatory framework governing the gaming sector". The latter, in fact, is still made up of a large number of national bodies and regional laws and provisions, without the effectiveness of a systematic reorganization which, at present, does not appear in the bills linked to the Update Note to the economy and finance document (Nadef), recently approved by the House and Senate.

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