Italy is considering raising approximately €700 million annually from the gambling industry, with lotteries and online operators potentially facing the largest financial impact.

Italy's gambling industry could face a substantial increase in its financial contribution to the government as Rome prepares its 2027 national budget.

The Italian government is considering measures that would generate approximately €700 million annually from gambling, with early reports suggesting that lottery operators and online gambling companies could bear much of the additional burden.

According to Italian financial newspaper Milano Finanza, the government is examining changes to lottery commissions and online gambling taxation rather than focusing primarily on land-based gambling businesses.

However, the details remain uncertain. The proposed measures had not been formally confirmed ahead of the Cabinet meeting scheduled for 28 October 2026, and earlier reports had suggested different approaches.

The final distribution of the tax burden will depend on the legislation presented to parliament.

Gambling expected to contribute nearly €1.9 billion

The proposed contribution forms part of Italy's wider financial planning for the coming years.

According to the draft budgetary plan submitted to the European Commission, the government expects additional gambling-related revenue of:

• €718 million in 2027
• €718 million in 2028
• €478 million in 2029

Combined, these measures would generate approximately €1.91 billion over three years.

The figures are part of a broader budget package reportedly worth €23.5 billion.

The government is also seeking approximately €5 billion in contributions from banks and insurance companies as it attempts to finance its spending priorities.

For the gambling industry, the main uncertainty concerns how the government intends to raise the additional revenue.

Earlier discussions focused heavily on gaming machines and the possibility of extending existing gambling concessions at higher prices.

The latest reporting, however, suggests that lotteries and online gambling could become the principal targets.

If confirmed, this would represent an important change in the government's approach to gambling taxation.

Lottery commissions could be reduced

One potential measure involves changes to the aggio, the commission retained by lottery operators and their distribution networks.

In Italy, lottery sales generate revenue for both the government and the companies responsible for operating and distributing lottery products.

The aggio determines the proportion of sales revenue retained by operators and retailers.

Reducing that commission could increase the government's share of lottery proceeds without necessarily changing the price of lottery tickets.

However, implementing such a measure could prove complicated.

In 2025, Italy awarded a new nine-year Lotto concession to LottoItalia, a consortium led by International Game Technology (IGT).

The agreement included a fixed commission rate of 6%.

Changing that rate during the concession period could raise contractual and legal questions, particularly because the financial conditions formed part of the original bidding process.

A reduction in the commission would also affect the revenue retained by operators and potentially their retail distribution networks.

The government would therefore need to consider how any proposed changes interact with existing concession agreements.

At present, no confirmed adjustment to the Lotto commission has been announced.

Online gambling operators face further costs

Italy's online gambling industry could also be required to contribute additional revenue under the proposed budget.

This would add to the financial obligations introduced through the country's recently reformed online gambling licensing system.

The new regulatory framework, which came into effect in November 2025, requires operators to pay €7 million for each online gambling licence.

Licensees must also pay an annual concession fee equivalent to 3% of their net gaming margin.

These costs have already increased the financial commitment required to operate in the Italian market.

Further taxation could place additional pressure on operators, particularly smaller companies with limited market share.

The industry is also preparing for new technical requirements.

Licensed operators must certify their gambling systems under updated regulatory standards by 15 February 2027.

The deadline was extended after authorities received fewer certification requests than expected.

Companies therefore face additional compliance obligations at the same time as the government considers increasing their financial contributions.

Italy's gambling advertising restrictions remain another important factor.

Under the country's Dignity Decree, gambling advertising is heavily restricted, limiting the promotional opportunities available to licensed operators.

Taken together, licensing fees, concession payments, technical compliance costs and advertising restrictions already create a demanding operating environment.

A further tax increase could encourage operators to review their investment plans and profitability expectations.

Land-based gambling may avoid the largest increase

Earlier reports suggested that Italy's retail gambling industry could face a substantial share of the additional tax burden.

One proposal involved increasing PREU, the tax applied to certain gaming machine stakes.

Italian gambling publication Agimeg reported that policymakers were considering an increase of approximately one percentage point.

Other reports suggested a smaller increase of between 0.5 and 0.7 percentage points.

However, those proposals reportedly faced resistance within the governing majority.

The latest suggestion that the government may instead focus on lotteries and online gambling could provide some relief for retail operators.

Nevertheless, land-based gambling businesses are not entirely protected from additional costs.

Existing concessions for slot machines, retail betting and bingo are scheduled to expire on 31 December 2026.

Further extensions will therefore be necessary unless replacement concession arrangements are introduced.

These extensions typically require operators to make additional payments.

The current extension arrangements generate approximately €232.76 million annually for the government.

Increasing the cost of future extensions remains another possible way to raise additional revenue.

Consequently, even if the government prioritises lotteries and online gambling, retail businesses could still face higher costs.

Retail industry warns against further taxation

Representatives of Italy's land-based gambling industry have expressed concern about the potential consequences of additional tax increases.

Retail operators already face significant operating costs, including premises, staff, equipment and regulatory compliance.

Unlike online businesses, physical gambling venues cannot easily reduce many of these expenses.

This makes them particularly sensitive to changes in taxation.

Dario Peirone, Director General of the Istituto Milton Friedman, recently warned that further tax increases could seriously damage the land-based sector.

He argued that additional fiscal pressure could threaten the survival of retail gambling businesses already operating under difficult conditions.

Industry representatives have also called for greater clarity about how the government intends to generate the proposed €700 million.

The lack of confirmed details has made it difficult for operators to assess the potential financial consequences.

For businesses planning investment and concession renewals, uncertainty over future taxation is itself a concern.

Italy's gambling market faces another regulatory challenge

The proposed measures come during a period of significant change for Italy's gambling industry.

The country has recently introduced a new online licensing framework, while the future structure of land-based concessions remains under discussion.

These reforms are intended to modernise the regulated gambling market, but they also require operators to make substantial financial commitments.

The 2027 budget could introduce another layer of costs before companies have fully adjusted to the new framework.

For international gambling groups, Italy remains an important European market.

However, the combination of licensing expenses, advertising restrictions and potentially higher taxes could affect how companies allocate investment across different jurisdictions.

The consequences would depend heavily on the final structure of the measures.

A change to lottery commissions would affect a different group of businesses than an increase in online gambling taxation or gaming machine duties.

Similarly, higher concession extension payments would place additional pressure on operators with substantial retail operations.

Until the government publishes the detailed legislation, the financial impact on individual companies remains difficult to assess.

Final decision moves to parliament

Italy's Cabinet was scheduled to meet on 28 October to approve the government's proposed 2027 budget.

Once approved, the legislation must proceed through parliament before the measures can become law.

This process could result in further amendments to the proposed gambling contributions.

The government has identified the sector as a source of substantial additional revenue, but the mechanism for collecting that money remains unresolved.

The latest reports suggest lotteries and online gambling may carry much of the burden, potentially reducing the immediate pressure on land-based operators.

However, alternative proposals involving gaming machine taxation and concession extensions have not been definitively ruled out.

For Italy's gambling companies, the publication of the budget legislation will be the next important development.

Only then will operators be able to determine how the proposed €1.9 billion contribution over three years could affect their businesses.

Source: IGamingBusiness