Following the Italian Economy Ministry’s submission of its draft online gambling law to the individual members of the EU and to the European Commission (EC)at the beginning of the year, it fell to the EC to respond with its own detailed comments. Unsurprisingly, Brussels found several things to dislike in the controversial text.

In a letter sent by the EC to the Italians, there are three key areas where the Commission has shown its disapproval, or rather its “doubts”: particularly it singles out the cost of the licence, the requirement for operators to connect their systems to the government central database, and the requirement for operators to have reached a certain level of betting turnover in the past to be eligible to request a licence.

The €300,000 cost of entry (in addition to regular four-figure annual licence fees payable to gaming authority AAMS) is criticized as being unrelated to the actual cost of providing authorization, even if the fee is proposed to fall proportionately each year as the deadline for the 2016 expiry becomes nearer.

The requirement that operators must connect to the government agency SOGEI, which controls the betting product and provides connectivity to the central database that effectively accepts the bets, is also criticized, particularly as the technical systems are non-standard and require costly development. The Commission asks the Italian authorities to “allow the use of alternative systems that are less onerous but still allow for an efficient and adequate control on the part of the State Monopoly” and avoid the present system’s “excessive complexity”.

Furthermore the present requirement that operators have reached several million euros of betting turnover in previous years before they are considered eligible comes under fire. The Commission suggests that the Italians suggest selection criteria that are “objective, transparent, non discriminatory and proportional.” In effect the EU wants that there be no limits on the number of operators allowed to request on-line licences in the territory, and finds that the current restrictions do seem to be having a restrictive effect.

One final thought for the government: once a company has received its licence, the authorities must, according to the Commission, ensure that operator’s website be no longer blocked by Italian ISPs. The letter sent to the authorities now needs to be considered by the Italian ministry, leading to further delay before fresh licences are formally available but also ensuring that some modifications will be required before the legislation arrives onto the statute book.