Are the odds stacked against success for Italy’s gaming and amusement industry?

Italy

WHAT is quite remarkable about the Italian gaming market is that, in spite of its size, it is continually in a troubled state. It could be argued that this stems from the recent recession from which the country has yet to fully emerge, but that does not fully explain the situation the 400,000-strong gaming machine industry finds itself in.

On paper, a country with a population in excess of 61 million and an installed base of more than 370,000 AWPs and 50,000 video lottery terminals should be Europe’s most successful market. It is, after all, the largest of its kind across the continent. What hinders its success, however, is the frankly ludicrous tinkering that goes on with its regulations and technical specifications. Again, this is not the whole problem – operators have in the past been accused of exploiting loopholes in previous regulations, requiring the authorities to make adjustments in order to close them.    

Having endured the transition to Comma 6 and Comma 6a, Italy’s AWP manufacturers and operators are now awaiting – to their growing frustration – the arrival of Comma 6a+. This new set of regulations is designed to tighten security around the machine, prevent underage gambling and allow for the modernisation of the games themselves. Consequently, this means a huge investment in either new equipment or converting existing machines in order to comply. At ENADA Rome, one of two gaming and amusement exhibitions held in the country, AWP suppliers and operators expressed their dismay at the ongoing delay between the new regulations being proposed and their final confirmation.

Operators are faced with the prospect of having to replace their machines to meet the new regulations, yet are in a state of limbo until everything is made official. For suppliers, this means their customers are reluctant to purchase new equipment until they know for sure. If these conditions weren’t already stifling growth, the Italian government is understood to be planning to go ahead with an increase in the PREU tax relating to gaming machines, further reducing margins. In 2012 this tax was actually reduced to 11.8 per cent, before rising in 2013 to 12.7 per cent. In 2015 it will be 13 per cent. The AWP sector is not being singled out, however, with the tax on VLTs having also more than doubled since 2011.

Read the full article in the December issue of InterGame