iGaming Daily

Viktor Kayed (00:02.494)
Breaking developments in Europe have seen the Italian Senate call on a review of the Dignity Degree of 2018 to either modify or revoke the unviable ban on gambling sponsorships applied across Italian sports. Expected to be called today, Sports Minister Andrea Aboardi will endorse a negotiation of a new gambling sponsorship code with Italian football clubs.

How will Italy's six-year prohibition on gambling sponsorships be terminated in a manner that satisfies all stakeholders? Meanwhile, Romania is in shock following a damning audit of the National Office for Gambling. Romania's gambling regulator has been accused of abject negligence in his duty to audit gambling licenses for the period from 2019 to 2023. The fallout for Romania's gambling sector is widespread.

as the government has been advised to initiate criminal proceedings against the gambling regulator. IGD examines two stories that will likely have a positive and negative consequence for the European gambling sector. I'm Victor Kayet, Senior Journalist for SBC News. I'm joined by Ted Menmure, Content Director. And we're going to explore these two very important topics. But before that, I want to say thanks to our sponsor, Optimo.

the number one CRM marketing solution for the iGaming market. So Ted, first off, thanks for joining me. We're gonna head straight into the news because I am conscious about time. There's so many things to discuss. So on Italy, let's begin with Italy. My first question is, is this a surprise call by the Senate?

Ted (01:40.829)
Goose goose.

Ted (01:54.652)
I think it's surprising just how fast it's moved. Now, the dignity decree, as you mentioned, has been imposed for six years. It was kind of foreseen to have a revision in 2023, but it was not part of the reorganization of gambling decree that the government commenced on and that the government is implementing. However, in December, Roberto Alessi, who was the Secretary General of the ADM, Italy's Customs and Monopolies Agency,

He commented that he thought the dignity degree or the sponsorship ban was no longer viable and it was that it shouldn't be upheld by the Italian state. Today, or it is expected that Andrea Bodi, who is the Italy sports minister, will call for negotiations to begin between Italian football and the Senate to...

either kind of withdraw the dignity degree sponsorship ban or to modify it. A lot is up in the air but what is significant is that there is going to be going to be an overturn of existing laws banning gambling sponsorships.

Viktor Kayed (03:08.707)
And why has the band been so controversial for Italian sports, football in particular?

Ted (03:15.364)
Well, I think if we revert back to 2018, Italy's new coalition government, which was formed out of leisure and the five star movement.

They took months to of negotiate terms of how they would govern Italy. And one of the decrees that they stood by was the Dignity Decree. Now the Dignity Decree isn't just about gambling. It sets out kind of 16 kind of civic responsibilities and civic duties that have been posed across different departments. And it kind of sponsorships and advertising as part of its mandate.

As such, it implemented a ban on advertising across Italian media and a ban on sponsorships.

Immediately, Sette A and Sette B in the Italian Football Federation contested it, saying that Luigi Di Maio, who was the former deputy, had imposed the law, had applied the law by bypassing federal amendments or federal procedures. And it took it to the courts. It has asked for the ban to be overturned numerous times. It's believed that the dignity decree has cost Italian football over 100 million per person.

no over 80 million euros per season since it's being implemented in direct costs. It's hugely unpopular. I don't think it carries any political favors with any parties and no one wants to uphold it.

Viktor Kayed (04:40.414)
Mm-hmm.

Viktor Kayed (04:50.398)
And obviously from what we know the consequences have been far-reaching the consequences of the ban. Why do you think it has taken six years to review?

Ted (05:02.856)
We're again turning back. I mean, look.

Once, as you know, from not only Italy, but kind of any European jurisdiction is that once kind of laws are applied, either it's especially in countries that have kind of state autonomies or kind of federal frameworks, it's very hard to kind of implement kind of reviews or to regress on policies that been applied. And I believe that it's the and also the state of how of how it's being kind of politically applied.

for that period, it never had kind of a fixed government who wanted to kind of take on the challenge. Even when the Maloney government came in with a majority in 2020, it first of all set about to kind of reorganize gambling laws rather than what had been what had been put through by the existing government. So I think rightly

observers kind of believed that there was ground to kind of fit in a review of the gambling decree in 2022 but it wasn't imposed by the government. I think you know these things take time. In six years the dignity degree has really shown kind of the the flaws of applying a sponsorship ban on domestic football.

And as the Senate said, it's created such friction not only between the football leagues, but also between the consumers. And it's aided kind of the black market to kind of encroach in a regulated market. It's it's long overdue. But I think, again, it kind of shows the way that you can reorganize the gambling sector.

Viktor Kayed (06:45.758)
You mentioned there the black market and obviously that's a huge topic there. It's not only in Italy, it's across the whole of Europe. Maybe that's what the Senate is aiming to target. What does it actually want to propose in its repeal?

Ted (07:06.972)
So according to Corriere La Sport, the Senate will propose a new code for sponsorships and one where it wants to apply a 1 % fee on betting gross revenues that will be used to kind of modernize Italian football, its stadiums, its women's leagues. The...

grassroots facilities and also to kind of upgrade youth systems. So again, it's very much kind of focused on kind of progressing in developing Italian football as a whole. And you've got to remember that Italian football is a very powerful political tool in Italy.

Viktor Kayed (07:49.758)
How are we feeling about the bureaucracy around this? Do we expect fast developments?

Ted (08:02.01)
I actually view this quite positively. I think once, especially in Italy, once the kind of motions are in charge and especially with the support of the Senate, we could see the basis of the sponsorship being overhauled, I'd say by age two, with the progress to get a new law kind of drafted by the end of the year.

Viktor Kayed (08:23.07)
That's most positive outcome for it to be done this year. Alright, that was the overview of what is happening in Italy. We're going to pause, we're going to take a break and we're going to head into Romania where things are heating up at the moment. See you in a bit.

Viktor Kayed (08:55.132)
Welcome back to the podcast. promised, we're going back now back. We're going to Romania. We've been there a couple of times before, but not today. Today. This is the first time for today. So Romania did as you know, this is, feel, I feel this country close. It's it's it neighbors my country. I'm from Bulgaria. So I'm really interested in, in the developments there and

These developments are not only important region-wise, they could hold a huge impact for the whole sector in Europe. basically there was an audit conducted by the Romanian Court of Accounts into ONJN, this is the Romanian gambling regulator. What were the grounds for this audit and what did it find?

Ted (09:48.124)
Mm-hmm.

Ted (09:53.694)
Okay, so the Court of Accounts serves as the kind of principal auditor of government offices and government bodies for Romania. And the audit was established on the grounds that over the period of 2019 to 2023, the ONJN, is the gambling office of Romania, has been kind of tasked with applying and auditing

new taxes that have been applied onto licenses for that period. during that period, we've seen kind of Romania chest changes thresholds for gambling taxes apply a new 2 % authorization fee and also a constipulation for vice taxes applied to to gambling. So there's been a lot of changes in kind of auditing and the CS the CCR.

basically did its duty and implemented an audit of that period on ONJN.

Viktor Kayed (10:57.464)
Mm-hmm and what were the results? Were the results in the norm or were they slightly out of the norm?

Ted (11:06.206)
That's a very nice way of putting it, but I think that the review politely said that it was kind of a systemic failure of the office.

across all disciplines related to tax audits and it's also tax collection duties. It stated that from 2019 to 2023 it had failed to kind of collect the majority of authorisation fees that left a hole of around 22 million in its budget. Furthermore, one of the biggest infringement here was that it stated that in a lot of the tax filings coming back from operators it had reviewed

Viktor Kayed (11:20.062)
Mm-hmm.

Ted (11:49.46)
and RTP manipulation where especially Maltese licensed operators or operators holding Maltese licenses had applied

had registered kind of lower RTPs that aren't allowed by mortal law to register that they had paid out high percentages for remaining customers, thus claiming lower taxes. The CCR reported that it believes that now that...

Viktor Kayed (12:13.118)
Mm-hmm.

Mm-hmm.

Ted (12:22.278)
It has calculated circa a 900 million pound liability in gambling taxes for the Romanian market over that period.

Viktor Kayed (12:32.178)
That's a lot of money and there's a lot to unpack there. So let me just summarize and you can correct me if I say something wrong. So the audit found that ONJN had failures first in compiling auditing data, which means that it didn't really have an overview into license holders integrity and compliance protocols.

Ted (12:40.604)
Hmm

Viktor Kayed (13:00.414)
which includes of course player protection duties dictated by the Romanian gambling law. Secondly, it failed to report on monthly fee allocations. think that this means, correct me if I'm wrong, I believe that this means that no verification was taken whether license fees have been paid since 2019, in the period between 2019 and 2023.

Ted (13:21.607)
Mm-hmm.

Viktor Kayed (13:29.214)
So that's four years of basically the main authority not having a clue whether the license fees have been paid or you know, let's not get into the details because we could get into legal troubles. But this is actually money lost that could have been reinvested into social initiatives for the betterment of the life of Romanian citizens.

Ted (13:42.845)
you

Viktor Kayed (13:58.948)
And third, the court found ONJN to have failed in applying penalties, which means that companies who were in breach of the above two points in the span of four years were not reprimanded in any shape or form. That's pretty much the summary of the findings, correct?

Ted (14:27.646)
Yes, I mean, I think you've got to put a technical framework to what is clearly kind of a negligence by the Office of Gambling and.

Viktor Kayed (14:35.87)
That's my second question. Are we talking about negligence here or corruption? What does the audit actually say?

Ted (14:45.458)
Look, as stands, the report here is primarily focused on the failures that it has witnessed. However, in having been submitted to the government, it does state that there is a grounds for the government to call for a criminal investigation of the gambling office.

Viktor Kayed (14:52.542)
Mm-hmm.

Ted (15:06.942)
there will be a severe kind of fallout from this. However, you know, I've to go back to my research on this article with 4-H or an agency based that specializes in developing in Eastern European markets. And they said part of the problem is kind of the structural issues of Romanian gambling with soap that has changed, that has kind of overseen a very kind of chaotic four year period, and especially in the governance of

Viktor Kayed (15:11.006)
Mm-hmm.

Ted (15:36.935)
of office of Romania's National Office of Gambling.

Viktor Kayed (15:42.142)
Sure, there's political troubles and instability in every country. I guess this could be used to explain, to partially explain the issue. But let's go back into it. How big of a hit will this have on the reputation of Romania's gambling market?

Ted (15:46.798)
you

Ted (16:11.526)
I mean what are you saying? think that license is gonna pull out? That there's gonna be a fallout or... That's very much unknown. think look in the context of remaining gambling it's remaining gambling is...

To an extent compared to other counterparts, it's quite an open marketplace. It is kind of competitive in the amount of licenses it has. However, there have been instances where there's a dispute of how the market's been organized there. Also, we saw last year that the government implemented was placing kind of tougher sanctions on retail organizations. But however, that's from the government. was never placed by the office itself.

Viktor Kayed (16:54.43)
Mm-hmm.

Ted (16:56.496)
don't know if anyone feels that the regulator has been kind of dormant at the wheel as what it states on that report. However, there will be implications. I do think that this kind of justifies either a complete revision of the regulatory status of the officer gambling or kind of a restart of how Romanian gambling is governed by which department.

Viktor Kayed (17:25.47)
So there will be definitely changes in the short term. We're just waiting to see whether or not they're going to be positive or negative. Let's talk about the outcome for the gambling sector. What I mean, what I'm going to do here is divide the gambling sector by companies and

Ted (17:30.546)
Mm-hmm.

Viktor Kayed (17:53.896)
customers. So first of all, you've mentioned the RTP manipulation. I want to specify here that the court said that there is clear evidence of this manipulation by companies who are licensed in Romania but are registered in Malta. So would this mean that there have been

Ted (18:17.244)
Mm-hmm.

Viktor Kayed (18:24.526)
major international operators involved in this or do you suspect that there is a case to be had that smaller, bigger operators have a lot to lose by taking advantage of this and it would be mostly the smaller operators who are working locally that have taken advantage of this.

Ted (18:52.292)
No, think that that kind of parameter kind of points to especially that was specially designed to online accounts and online audits. didn't specify the size or give out any names. It did say kind of in the did say instances of an operator in brackets not being able to pay it or not being able to or submitting a different kind of RTP than what is allowed by the Maltese government.

So it was kind of clear negligence, a clear kind of play of the numbers there. Again, what the article doesn't stipulate, it stipulates that the gambling office has been negligent in enforcing penalties and enforcing kind of compliance on its licenses, but it doesn't name which licenses should have been penalized.

Viktor Kayed (19:43.001)
Mm-hmm. Mm-hmm. And this is this is this is the mystery that encompasses This story that's the the fog of war as gamers like me know it. Do you think? What is the right way here should should these companies be named and shamed publicly? What do you think or us?

Ted (20:06.992)
Again, I'm not the Romanian Tax Authority. And the thing is, I think that this was an audit. And you have to remember this, it's an audit of a government department that is outside of naming kind of commercial entities and just saying that, the failures here were on the principle of this department not doing its job. And I think that, you know, we even see this, it's not just a case of this is what happens in Romania.

Viktor Kayed (20:12.539)
Of course.

Ted (20:36.895)
that this for a government service to do that, it's much more kind of aligned to its duties of we are auditing a department and a department's duties.

Viktor Kayed (20:50.992)
Even if these licenses or the license holders remain unnamed, what do you think would be consequences for these companies' licenses?

Ted (21:03.754)
To me, as stands, everything points out to it's in the government's hands of how they will take on this information and what kind of revisions they will put into the office of gambling in Romania. I think another factor here is that the remaining government itself has, you know, upcoming decisions.

in how to regulate the sector, including land-based reforms that it wants to put in, and also with regards to overall online licenses. So again, we're looking at a transformative year for Romania. I think that this will have consequences and ramifications for the industry, especially to a market that's still relatively young, but also very competitive in its

Viktor Kayed (21:42.002)
Mm-hmm.

Ted (22:02.239)
of operators.

Viktor Kayed (22:06.658)
Okay, that was the business side. What about the customer side? How could this have affected the end customer, do you think?

Ted (22:16.541)
I don't know, Victor.

Viktor Kayed (22:22.231)
In a I'm talking about a situation where a customer

Viktor Kayed (22:31.734)
All right. Okay. I wanted to ask about who bears the legal responsibility here. Just it's interesting question, but okay, you're right. So we're diving into more details. Okay. I'm going to skip to the, to the final two questions, which are how will the government deal with the situation and why has the governance of Romanian gambling been so chaotic since 2019? Is that all right?

Ted (22:57.598)
No just ask once. No just finish it.

Viktor Kayed (22:59.694)
Okay, choose one. Last one.

Viktor Kayed (23:06.181)
Okay.

Viktor Kayed (23:10.532)
Okay, this was Sedman Muir, Content Director for SBC Media, diving straight into the news. Unfortunately, that's all the time that we had for today. However, there's still plenty of SBC content out there waiting for you. You can read all about what we discussed today and more by clicking on the links in the description below. For iGamingDaily, this was Victor Cayet. Stay tuned for the next episode.