LeoVegas Files EU Complaint over Italian Gambling Ad Ban
LeoVegas filed a complaint with the European Union over Italy’s recent gambling advertisement ban. LeoVegas, an award-winning Swedish gambling site with operations based in Malta, claims the Italian ban on gambling ads violates EU standards in three separate ways.
The legal complaint states that Italian advertising laws violate a specific recommendation the European Union made on gaming laws in 2014.
Earlier this summer, the new Italian government passed a law banning all advertisements by gaming companies during Italy sports broadcasts and live streams. The ban extends to sponsorships of Italian football clubs.
Since over half of Serie A clubs have gaming-related sponsorships, those clubs protested to Italian lawmakers the new law would cost them $200 million or more each year. Given the inability to replace that cash with non-gaming advertisers, Italian clubs have said the ban would harm their youth and talent development programs.
Serie A Football Club Advertisements
Top Italian football clubs have struggled with UEFA financial fair play requirements for the past few years. AC Milan received a two-year suspension by UEFA for its failure to play by its requirements. The coalition government, led by the Five Star Movement and Lega Nord (The League), passed laws to make it harder for clubs like AC Milan and Juventus to compete in European events.
Despite the protests from a variety of Serie A clubs, the Italian ban is set to go into effect in January 2019. Furthermore, Italy’s new leaders have said the have plans to campaign with other EU nations to have such laws passed throughout Europe.
European Commission Recommendation
LeoVegas decided to take action on behalf of the European gambling industry. Citing a 2014 provision of the European Commission Recommendation (Clause 478), LeoVegas filed a complaint with the EU arguing that the European Commission views gambling advertisements as legitimate.
Clause 478 states the licensed gambling companies can advertise in sporting events under EU law, because it is an important way for licensed companies to distinguish themselves from unlicensed companies. By playing within EU law, those companies are supposed to gain advantages.
Treaty on the Functioning of the EU
The lawyers for LeoVegas also cited Article 54 and Article 56 of the Treaty on the Functioning of the European Union. LeoVegas argued that the ban on advertising is a restriction of market access, which is a direct challenge to EU law.
In LeoVegas’s rationale, a ban on marketing means the incentive for operators to invest is less, because growth cannot be reasonably assured. Even if a partial ban was placed on operators’ advertisements, LeoVegas argues that a less restrictive ban could have been implemented which would have protected Italian underage viewers and still allowed gaming sites to market themselves.
LeoVegas’s approach has not been entirely confrontational. The company’s spokesman said it has been in contact with Italian lawmakers to “educate” them on its point of views — it has been lobbying the Italian parliament to get the laws changed. LeoVegas said it hopes Italy changes its mind before the January implementation.
Agenzia delle Dogane e dei Monopoli (ADM)
Meanwhile, the Italian gaming regulatory agency, Agenzia delle Dogane e dei Monopoli (ADM), will begin accepting new license applications in the coming months. In all, 120 online gambling licenses will be handed out.
The types of online gambling sites which will be licensed includes bookmakers, sports betting exchanges, online casinos, and poker sites. The only types of sites which are banned are online lottery companies, to make way for Italian lotto companies.
ADM Online Gambling License Requirements
Of the total 120 licenses available, the ADM said about 30 of the licenses have been earmarked for licenses which recently expired. It sounds like the ADM plans on continuity between the old system and the new.
The ADM said that 80 applications have been received already, though some of those applications were filed before the advertisement ban was announced. The final deadline for applications will be March 21, 2019. After a period to review such applications, licensing decisions will be announced later in 2019.
License decisions will be made on a first-come, first-served proposition. The cost of an Italian online gambling license will be £175,000, or roughly $321,000 in US dollars at the current rate of exchange. It is unknown if LeoVegas’s decision to file a complaint with the European Commission will have any bearing on the ADM’s decision whether to issue a gaming license for the online casino operator.