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Mar
20th

High Taxes May Stifle Italian Bingo Development

In recent years several internet bingo operators have eyed Italy as the next big bingo market. Italy is home to one of Europe’s lotteries the SuperEnaLotto and gambling has long been popular in Italy where the game of bingo was invented. Five hundred years later bingo is poised to return to Italy online. Bingo operators have long regarded Italy as an attractive bingo market. Internet access has increased in Italy and the use of credit cards is common making it a ready market for internet bingo.

Last year internet bingo became legal again after a decision that suspended laws regulating online bingo. Italy is one of Europe’s largest gambling markets so many bingo operators made plans to enter the Italian bingo market. Heavy taxation by the Italian government may thwart the plans of many internet bingo operators to enter the Italian bingo market. At the present time the Italian government has not set the taxation rates but most experts believe the rates will be anywhere from 11.5% to 23% on all stakes. In addition 70% of all stakes must be returned to the player. License fees are incredibly expensive and cost €350,000 ($496,802.94 USD) annually.

The high taxation and license will make it difficult for a standalone internet bingo operator to make a decent profit in Italy. Some online gaming companies doing business in Italy have added internet bingo and have reported decent profits. One industry expert says that a standalone bingo operator in Italy would have to have a gross monthly revenue of €700,000 ($993,682.71 USD) to break even in the Italian bingo market. Players will suffer from the excessive taxation as bingo providers pass the costs to customers. Sign up bonuses and reload bonuses will be much lower than in other countries and card costs will increase making internet bingo less affordable to Italians.

Since players will be adversely affected by high taxation the total tax take for the Italian government will be lower. High tax rates inhibit developing businesses and stifle growth and innovation. Most internet bingo operators will not be willing to invest millions for a smaller return than they can get in other countries with more favorable tax rates. It would be a positive development for bingo providers and the Italian government if some sort of agreement to mitigate the tax bite could be reached.