Italy’s draft budget puts LAN venues under gambling regulator

Italy’s draft 2027 budget would place LAN gaming venues under the supervision of the Customs and Monopolies Agency (ADM), the country’s gambling regulator. The proposal bans betting and cash prizes at the venues. The Italian Interactive Digital Entertainment Association (IIDEA) is calling for the removal of Article 25, which contains the proposed rules.

The bill is under parliamentary review. IIDEA is discussing the proposal with political groups and seeking changes. More information about the bill’s progress is expected next week.

Article 25 would introduce an 8% entertainment tax on skill-based digital games delivered through remote online platforms at commercial venues. The tax would be based on fixed annual income rather than actual revenue. It would amount to €15,000 per standard PC or console station and €25,000 per large simulator. At an 8% rate, the annual tax would be €1,200 per standard station and €2,000 per simulator.

A venue with the proposed minimum of 20 stations would owe €24,000 in annual tax before other charges. Operators would also need ADM authorisations every two years. The proposed fees include €200 per station, €1,000 per venue, €2,000 for each video game title and €10,000 for each online platform.

The rules would limit PCs to gaming and ranking activities. Venues would have to verify customers’ ages using the PEGI classification system, arrange their premises so visitors could monitor the passage of time, and keep user activity and communication records for at least five years.

ADM would be able to set limits on tournament entry fees and prize pools. It could also charge a supervisory fee of up to 8% of participation fees. Existing venues would have 60 days to file self-declarations and pay initial taxes. Implementing rules would be issued within eight months.

The bill’s technical report estimates that Italy will have 200 venues and 4,000 stations in 2027, generating €5.87 million in taxes and fees. From 2028, it forecasts 2,300 venues and 46,000 stations, producing €66.03 million annually. The projected amount falls to €56.27 million in 2029. The 2028 estimate assumes one venue for each municipality with more than 5,000 residents.

IIDEA estimates that Italy currently has about 70 active LAN centres, with 20 meeting the proposed minimum of 20 stations. The association values the Italian esports industry at between €32 million and €35 million in 2026 and projects that it could reach €60 million by 2030. The projected 2028 tax and fee revenue would therefore be higher than the association’s estimate of the sector’s current total value.

IIDEA classifies video games as part of the cultural and creative industries rather than public gambling. It has warned that the proposed taxes, authorisations and operating rules could increase costs for small businesses and grassroots organisations, as well as publishers, developers, online platforms, tournament organisers and players.

The dispute follows action by ADM in April 2022, when the agency seized gaming equipment from several Italian LAN venues over missing certifications for amusement and gambling machines. In May 2022, then Undersecretary of Finance Federico Freni said dedicated legislation would recognise and regulate esports. IIDEA maintains that Article 25 would instead impose gambling-style controls on venues that do not offer betting or cash prizes.

Reviewed and fact-checked by Alex Panasenko on November 13.