Italy gambling reform brings rapid consolidation to Europe’s largest market
On 30 May, Italy Customs and Monopolies Agency (ADM) officially ended its tender process to award remote gambling concessions in the country. Successful bidders are expected to be announced after summer, but regardless of the outcome, industry stakeholders are expecting a major shake-up of Europe’s largest market.
Speaking to Sigma magazine ahead of the changes, Moreno Marasco, the president of Italy’s LOGiCO online gambling association, predicted a steep decline in the number of operators active in the jurisdiction.
Compared with the previous tender that attracted 93 applications, only around 50 are believed to have thrown their hat in the ring this time around. At current predictions, the Italian market is expected to shrink from the current 81 to around 33 concessionaires, cutting the number of remote operators by around 60%.
“This is a significant drop, despite the Italian market’s exponential growth in both revenues and legal operators,” Marasco said.
When the new system comes into force, he added, “the competitive landscape will be thoroughly redrawn”.
The main reason behind this tectonic shift is that ADM has set much higher hurdles for would-be concession-holders this time around. One in particular – an initial licensing fee of €7 million – has inevitably priced smaller players out of the market.
Rapid consolidation
According to Christian Tirabassi, founder and senior partner at M&A advisory firm Ficom Leisure, this consolidation is exactly what the government had hoped to achieve.
For years, there were surprisingly few barriers to entry into one of Europe’s most affluent and prominent gambling markets. Now, in a move to modernise its legislation and bring regulations up to speed with the scale of the market, regulators are weeding the smaller fish out of an increasingly sizeable pond.
“There are very small companies that were able to operate in a market that was [worth] €4 billion at the time, now €5 billion, with an investment of €250,000,” said Tirabassi, referring to the previous cost of an Italian remote gaming concession.
“The regulator decided that this is not acceptable. You don’t want to put a delicate operation like this in the hands of a company without financial strength.”
This time around, the focus has been on companies that can meet the highest financial, technical and compliance standards – those who, in the words of Tirabassi, won’t skip AML requirements to save €5,000.
‘Natural selection’
As well as shelling out €7 million per vertical and per brand, online sports betting and online casino operators will pay 24.5% and 25.5% tax on GGR respectively. Operators are also subject to an annual fee set at 3% of GGR and must spend at least 0.2% of their GGR on responsible gambling campaigns – capped at €1 million.
In preparation for the new concessions scheme, Ficom has been involved in several M&A deals in which small- and medium-sized operators were absorbed by larger ones. While consolidation is nothing new, Italy’s gambling reform seems to have dramatically accelerated the trend.
“Post-tender, we expect large, integrated, multi-product, multi-channel companies to dominate the market,” Tirabassi explained.
In future, the M&A specialist expects just a handful of operators to generate around 80% of Italy’s €5.2 billion in remote GGR, with no more than 30 or 35 operators active in the legal market as a whole.
“The reform has brought the price of the licence to a normal level,” he added. “The previous price – how cheap it was – that was the abnormal part. Add to that the stricter requirements and the fact that, to be successful in Italy, you need to be omnichannel. All of that has created natural selection in favour of larger corporations.”
Sweeping gambling reform in Italy
The rapid concentration of revenues in the hands of a small number of operators is far from the only change afoot in Italy. With its overhaul of the system, the government wants to ramp up standards in everything from cybersecurity to AML and player protection.
An outlier within Europe, Italy has regulated online gambling since 2006. When the new technical reforms come into force – some months after the concessions are awarded – it will put an end to a scheme that has been in place for almost 20 years.
Some new regulations are designed to adapt to – and make better use of – the trend towards digitalisation. For example, a number of new player protection tools will be put in place, allowing customers to set limits on their deposits, spend and playing time, as well as self-excluding from online platforms.
Automated warning alerts will also aim to dampen compulsive behaviour, with stricter controls targeted at the younger 18-24 age bracket – a first in European regulation.
The relative stability in Italy’s gambling market over the last decade has paid dividends for the industry, with total GGR hitting €21.6 billion in 2024 – up 4.4% from the year before. Around a quarter of this – €5 billion – was accrued online and operators are seeing dizzying growth in this sector.
Flutter primed to lead with Snai in its Italy inventory
This consolidation has already been seen in deals like Flutter’s €2.3 billion acquisition of Playtech’s Snaitech last year.
In September, analysts at Jefferies estimated Flutter could end up with a 30% share of the Italian gaming market with Snaitech in its portfolio, thanks to its multi-brand positioning. It expects the group to maintain a top spot for online share.
Flutter had a 15% GGR share of the Italian online betting and iGaming market in 2023 through its Sisal and PokerStars brands. Snaitech came in just behind on 10%.
Delays to land-based Italy gambling reform
Along with the new remote concessions, Italy is also set to overhaul its land-based market, unifying its licensing scheme, introducing strict location rules, limiting cash deposits to €100 per week and introducing mandatory ID and self-exclusion systems.
However, pressure from regional authorities has forced the government to push back these reforms to mid-2026, rather than the end of 2025 as previously planned. By then, the federal and local governments will aim to clarify some crucial questions over funding.
According to Tirabassi, success in the Italian market depends on having a scalable omnichannel business, operating both online and land-based gambling under the same brand.
Since skins are forbidden under the new concessions scheme, operators will have to secure concessions not just for every vertical and channel they want to operate in, but also for any separate brands. This could make the consolidation of the market all the more visible in future.
With the higher barriers to entry, the Ficom founder predicts those who win out in the market could ultimately reap much greater rewards, sharing larger proportions of an even larger pie.
Amid these rapid changes, however, one thing is set to remain the same: incumbent IGT will continue to exclusively operate the Italian lottery until 2034.
After a nail-biting clash of the titans, the IGT-led consortium LottoItalia announced it had beaten contender Flutter to win a nine-year renewal of its exclusive lottery concession. It did so by putting together a bid of €2.23 billion for tender – more than double the €1 billion base price – proving once again that in the modern Italian market, it’s all about financial clout.