Italy to Increase Gambling Taxes for Purposes of Budget Replenishment

The government of Italy has announced possible gambling tax hike – yet another one – that could be instated in purpose of filling the state budget for 2020.

Several media outlets across the country have reported this possibility – and added that some more severe actions could be on hand too.

Big Taxes For Big Wins

Italian lawmakers have proposed a 23% tax on big winnings…

…which will be applied to all players who strike it big and win big lottery jackpots. The current tax rate is 12%.

Recently, an anonymous player won a EUR 209 million jackpot playing SuperEnalotto – operator Sisal’s popular game played by local punters.

This win is what gave lawmakers and government officials an idea to increase the tax. If the 23% tax was applied on this win, the player would have to pay EUR 48 million from total amount won and that money would be sent to Italy’s budget for next year. At the current rate, the lucky player will need to pay “only” EUR 12 million.

Reducing country’s deficit hasn’t been going in accordance with plans and European Commission goals. That’s why Italian government is resorting to these measures. Last year’s budget also involved new gambling tax provisions while the parliament approved a budget that included tax increase on online gaming and online sports betting.

Bad News For “Small” Winners Too

As a reminder, Italy has already introduced new tax rates for all casino operators, effective from 1st of January this year. Online operators now have to pay a 25% GGR tax (was 20% prior to changes), while online sports betting operators now need to pay 24% (up from 22%). Retail betting taxes rose to 20%.

Even though this attempt of tax increase is backed by experts saying that it would inject additional EUR 80 million in gambling taxes…

…there are more bitter news for winners of small jackpots, as media speculates that what is also in the cards is: increase of small wins taxes!

In Italy, any wins smaller than EUR 500 are free of taxation. But from next year, there could be a 12% tax rate on those as well. It would be applied to all gambling winnings, not just lottery.

The idea is to gradually and progressively raise all gambling winnings taxes until they’re all at 23%.

Opposition is Vocal

It is expected that these harsh measures will not go by easily…

…and those criticizing them say that it may even lead to lottery’s decrease in profits. Around EUR 100 million is played on lottery games in Italy every year. However, EUR 80 million of that are replayed winnings. Only EUR 20 million actually leaves players pockets due to this: if a player wins EUR 5 on a scratchcard game, they will invest that money in another scratchcard game. With a 12% tax, that win would decrease to 4.4 and instead of spending EURO 0.6 to buy another scratchcard most players would rather collect the EUR 4.4.

This principle is applicable to other verticals such as sports betting as well. Replayed winnings could fall down significantly and lotteries and other games would lose money.

Source:

“Giochi, tassa sulle micro-vincite: stangata sul jackpot del Superenaloto”, ilmessaggero.it, October 11th 2019