Italy Chastised By Europe Assn. Over Meteoric Rise of Black-Market Gambling

Posted on: October 20, 2023, 07:39h. 

Last updated on: October 20, 2023, 11:49h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

An Italian sports media outlet, La Gazzetta dello Sport, recently reported that black-market online gambling in the country is now worth more than $26 billion. The European Gaming and Betting Association (EGBA) puts the out-of-control increase squarely on Italy’s strict gambling ad ban, a warning that other countries should heed.

The Italian flag flying in front of the Monument to Vittorio Emanuele II in Rome, Italy
The Italian flag flying in front of the Monument to Vittorio Emanuele II in Rome, Italy. The country’s complete gambling ad ban is driving an increase in black-market gambling. (Image: Pinterest)

The media outlet reported that “overall turnover of illegal gambling in Italy amounts to €25 billion (US$26.47 billion).” This not only deprives the consumer sector of funds and jobs, but it also means the government is losing about €1 billion (US$1.05 billion) in tax revenue.

The EGBA released its response just days after the report emerged. While it points out that Italy’s Customs and Monopolies Agency (ADM, for its Italian acronym) is trying to stifle black-market growth, it’s a never-ending challenge.

The ADM has so far ordered 9,800 unlicensed online gambling websites to be blocked in 2023. This is a meteoric rise from the 400 last year, but only shows how prevalent illegal online gambling is in the country.

Ad Ban is Killing Regulated Gambling

The EGBA reports that the amount wagered through offshore platforms is equal to the total combined regulated online gambling revenue of eight other European Union (EU) countries. The flourishing black market in Italy is primarily attributed to the country’s prohibition of gambling advertising. This ban seems to favor illegal operators, according to the EGBA, leading to calls for a reconsideration of the existing regulatory framework.

The significant size of Italy’s online black market is concerning, yet it is not surprising given that Italy has one of Europe’s strictest advertising regimes for its licensed gambling companies,” said EGBA Secretary General Maarten Haijer. “The country’s ban on advertising for licensed gambling operators is clearly favoring the black market.”

Due to the absence of sufficient advertising, the obvious result of the ban, distinguishing between a licensed Italian gambling website and an unlicensed one becomes challenging for Italian consumers. It’s also evident, despite the increase in the number of blocked sites, that the enforcement actions against black-market operators are currently inadequate.

A significant concern stemming from this situation is that numerous Italian players are gambling on websites located outside the EU. According to the EGBA, these offshore platforms may not offer even the most basic level of consumer protection, leaving Italian gamblers exposed to potential risks.

Other Countries Should Take Note

Gambling ad bans are being considered in the UK, Ireland, Australia, and other countries, raising concerns. Italy’s experience suggests strict ad bans can inadvertently fuel illegal gambling growth, posing risks to consumers.

The UK, in particular, faces a heightened risk in the wake of potential gambling ad bans. The implementation of affordability checks and additional restrictions poses a dual threat.

On the one hand, it may drive players toward unregulated platforms where such checks aren’t in place, exposing them to potential harm. On the other, the regulated gaming industry in the UK could suffer a larger blow.

Increased restrictions may drive away legitimate operators and diminish the industry’s economic contributions. Striking a balance between consumer protection measures and maintaining a thriving regulated gaming sector is a delicate challenge for policymakers.