Betting in sports events: gambling in Italy.
The purpose of this study is to conduct an analysis on the betting games' sector. To begin with, this article shall underline the dominant role of the Italian State in the past years and how the state is slowly losing its grip and role in relation to gambling in sports as a result of the increasing flexibilities of internet. We shall thereafter highlight the key economic consequences produced by betting on all the parties involved in these activities.
How can we define betting in sporting events? How can we distinguish legal betting from illegal gambling? How can we combine the needs of the State with its desire to exercise and manage the betting system with the globalisation of the market?
We shall try to give some answers to these questions through conducting a study on the Italian "grants system", and how this system has been modified over the years, from 1948 up to December 2008. The definition of "gambling" has been modified too; a strict definition of gambling can be found from the Italian Criminal Code and in a particular Act (L. n.401/1989) which is directed at preserving the State's control and monopoly over gambling laws despite rulings from the European Court of Justice to the effect that the Italian national laws are contrary to the European principles on freedom of establishment and freedom of providing services.
The second part of our study shall focus on the AAMS, its structure, its functions, the evolution of its role and its aims for the future. At the same time, we shall distinguish between sporting and non sporting related betting events (1).
2. The Definition of gambling as a criminal offence
The definition of gambling can be found in the "Study of Gambling Services in the Internal Market of the European Union" of 2006, wherein gambling has been defined as " any service, including any information society service, which involves wagering a stake with a monetary value in games of chance, including lotteries and betting transactions" (2).
This definition has more or less been adopted in the same breath in Article 721 of the Italian Criminal Code, which aims to punish gambling activities which are conducted in a public area and/or private clubs. Art. 721 states that: "Gambling is playing games for a personal profit when the results are completely based on uncertain events".
Over the previous years, Italian doctrine (3) has been established and evolved for purposes of distinguishing gambling from simple betting games. The above mentioned list is based on the two criteria described under Article 721, these criteria being i) the personal profit and ii) the results coming from uncertain events. On this basis, gambling includes:
Bingo, black jack, lottery, roulette, slot machines, video poker,
Simple betting includes: betting on sports events, betting on horse races, poker, bridge, and flipper. It is important to underline that the players' personal abilities to contribute in the game being played fall under the second group (4).
2.1. Legal Gambling
As earlier highlighted, Article.718 of the Italian criminal code punishes gambling activities which take place in public and/or private clubs. However it is important to note that gambling can sometimes be legal,
and especially in situations where there is public authorisation. Public authorisations serve various purposes; for instance, through the grant coming from the State, the possibility of injecting revenues is made higher. We shall revisit this discussion during our study on the evolution of the "grant system" in Italy.
3. Act No. 401/1989 and the European reaction in the "Gambelli" and "Placanica" cases
As earlier seen, betting on sports events does not amount to illegal gambling. However, Italian judges have on some occasions tried to subject such types of betting to the rules of Article 718. A classic example involves "Tontero", which is an unauthorised betting activity in Italy, whose authors faced criminal consequences The decision of the Italian judges to the "Tonrero" case however did not root out the problems related to betting and gaming,. This prompted the Italian law makers to deliver a new Act addressing the issue of illegal exercise of betting activities in sports events (5).
Article 4 of the Act No. 401/1989 provides criminal sanctions in cases of:
Illegal exercise of the game "lotto" and the other games controlled by the State or granter societies; Illegal exercises of the games controlled by CONI and/or UNIRE; Illegal exercises of other examples of betting in relation to human beings and/or animals.
Article 4, co. 4 bis, imposes criminal sanctions on anyone who exercises, controls and manages betting without the public and specific authorisation whether the said person is Italian or otherwise. In essence, this law places betting games under the control and direction of the Italian State.
For this specific reason, Italian legislation has been heavily criticised by the European Court of Justice which has on occasion declared that it violates Articles 43 EC and 49 EC (the "Gambelli" (6) and "Placanica" (7) judgements). In the eyes of the European Court of Justice, the criminal penalties imposed by the Italian laws and the overall restrictions directed towards the foreign betting agencies, go against the freedom of establishment and provision of services. According to the ECJ, the Italian state may control betting activities but it cannot at the same time retain a monopoly whereby it is the only institution which provides and manages betting games.
On the same breath and direction the award No. 284/2007, delivered by the Italian Constitutional Court; states that Italian judges shall not apply the national legislation for the reasons mentioned hereinabove (8).
3.1. The Piergiorgio Gambelli case
By order dated 30 March 2001, issued by the European Court of Justice on 22 June 2001, the Tribunale di Ascoli Piceno referred an issue for the interpretation of Articles 43 and 49 EC to the Court for a preliminary ruling under article 234 EC.
This issue was raised in criminal proceedings brought against Mr Gambelli and 137 other defendants, who were accused of having illegally organised clandestine bets and of being the proprietors of centres carrying on the activity of collecting and transmitting betting data, which constitutes an offence of fraud against the State. In particular, the Public Prosecutor and the investigating judge at the Tribunale di Fermo established the existence of a complex organisation of Italian agencies linked through internet to the English bookmaker Stanley International Betting Ltd (Stanley), established in Liverpool, and to which company Gambelli and the other defendants belonged to. On this basis, they were accused of having collaborated in Italy with an overseas bookmaker in the activity of collecting bets which is normally reserved by law to the State, thereby infringing Law n. 401/1989.
Such an activity, in the eyes of Italian legislation, was considered as being incompatible with the monopoly on sporting bets which is managed by the CONI (Italian National Olympic Committee) and for this reason it could constitute a criminal offence under article 4 of Law n. 401/1989.
It is important to underline that the Court has been called to interpret the compatibility of the Italian criminal legislation regarding betting games with the European law.
In the eyes of the European the Court, the Italian legislation was held to constitute a restriction on the freedom of establishment, which includes restrictions on the setting up of agencies, branches or subsidiaries, prohibited by Article 43 EC. In particular, the court emphasised that "where a company established in a Member State (such as Stanley) pursues the activity of collecting bets through the intermediary of an organisation of agencies established in another Member State (such as the defendants in the main proceedings), any restrictions on the activities of those agencies constitute obstacles to the freedom of establishment (9)".
Furthermore, the Italian legislation constitutes a restriction on the freedom to provide services. Article 49 EC prohibits restriction on freedom to provide services within the Community for nationals of Member States who are established in a Member State other than the State of the person for whom the services are intended. However, Article 49 EC "covers services which the provider offers by telephone to potential recipients established in other Member States and provides without moving from the Member State in which he is established" (10).
In light of these considerations, the Court stated that: "National legislation which prohibits on pain of criminal penalties the pursuit of the activities of collecting, taking, booking and forwarding offers of bets, in particular on sporting events, without a licence or authorisation from the Member State concerned constitutes a restriction on freedom of establishment and the freedom to provide services provided for in Articles 43 EC and 49 EC respectively, which, to be justified, must be based on imperative requirements in the general interest, be suitable for achieving the objective which they pursue and not go beyond what is necessary in order to attain it and be applied without discrimination. In that connection, it is for the national court to determine whether such legislation, taking account of the detailed rules for its application, actually serves the aims which might justify it, and whether the restrictions it imposes are disproportionate in the light of those objectives.
In particular, in so far as the authorities of a Member State incite and encourage consumers to participate in lotteries, games of chance and betting to the financial benefit of the public purse, the authorities of that State cannot invoke public order concerns relating to the need to reduce opportunities for betting in order to justify measures such as those at issue in the main proceedings. Furthermore, where a criminal penalty was imposed on any person who from his home in a Member State connects by internet to a bookmaker established in another Member State the national court must consider whether this constitutes a disproportionate penalty".
This position had been previously confirmed in 2007 in another criminal case, the "Placanica" judgement, where the Italian legislation declared beyond any doubt as being incompatible with the European principles on freedom of establishment and freedom to provide services within the Community.
3.2. The Massimiliano Placanica case
This issue arose as a result of the decision of Stanley Leisure plc, one of the biggest bookmakers in the UK to engage in the collection of bets through the use of Mr Placanica and Mr Sorriccio as their Data Transmission Centres (or agents) in Italy because the Italian laws on tendering procedures prohibited companies such as Stanley Leisure plc from directly engaging in betting games in Italy because Stanley Leisure plc was part of a group which had been quoted on the Italian regulated markets.
The central issue in this case concerned whether Mr Placanica, Mr Palazzese and Mr Sorriccio had violated the Italian criminal laws (11), in particular Article 4 (4a) of law No. 401/89 by pursuing the organised activity of collecting bets without possession of a licence or police authorisation (12) as required of Italian law through as Stanley Leisure plc.
The EC was called upon to decide whether these Italian laws were contrary to Articles 43 EC and 49.
The Court made specific reference to the ruling in Gambelli and reiterated that where national legislations prohibit on the pain of criminal penalties, the pursuit of activities in the betting and gaming sector without a licence or police authorisation issued by the state, then such a law constitutes a restriction on the freedom of establishment and the freedom to provide services.
It however said that where national laws impose restrictive measures on the ability to engage in the collection of bets, such restrictions must be assessed on a case by case basis in order to determine whether they are suitable for purposes of achieving the objective(s) invoked by the member state concerned and whether they do not go beyond what is necessary in order to achieve these objectives (13).
The Court reiterated the need to distinguish on one hand, between the objective of reducing gambling opportunities in so far as games of chance are permitted, and on the other hand, the objective of combating crime by making the operators who were active in the gaming sector subject to control and channelling the activities of betting and gaming. See Para 52.
In applying this criteria to the case beforehand, the court went on to find on paragraph 54 of its ruling that "(...) in the present case, according to the case law of the "Corte suprema di cassazione" ( the Italian Supreme Court) that the Italian legislature is pursuing a policy of expanding activity in the betting and gaming sector, with the aim of increasing tax revenue, and that no justification for the Italian legislation is to be found in the objectives of limiting the propensity of consumers to gamble or of curtailing the availability of gambling"
The Court referred to the decision of the Tribunale di Teramo in cases C-359/04 and C-360/04 which expressly excluded companies such as the defendants whose individual shareholders could not be easily identified from the tender licensing process and reiterated on paragraph 64 that "Articles 43 EC and 49 EC must therefore be interpreted as precluding national legislation such as that at issue in the main proceedings, which excludes-and, moreover, continues to exclude-from the betting and gaming sector operators in the form of companies whose shares are quoted on the regulated markets"
In relation to the need to obtain police authorisation, the court stated that member states cannot apply criminal penalties for failure to complete an administrative formality where such completion has been refused or rendered impossible by the Member State concerned, in infringement of Community (14). It came to the conclusion that the defendants "had no way of being able to obtain the licences or police authorisation required under Italian legislation because, contrary to Community law, Italy makes the grant of police authorisations subject to possession of a licence and, at the time of the last tender procedure in the case which is the subject of the main proceedings, had refused to award licences to companies quoted on the regulated markets. In consequence, Italy cannot apply criminal penalties to persons such as the defendants in the main proceedings for pursuing the organised activity of collecting bets without a licence or a police authorisation" (15)
The precedent issued by this court was to the effect that:
Articles 43 EC and 49 EC had to be interpreted as precluding national legislation which excludes-and, moreover, continues to exclude-from the betting and gaming sector operators in the form of companies whose shares are quoted on the regulated markets.
Articles 43 EC and 49 EC preclude national legislation, which impose criminal penalties on persons such for pursuing the organised activity of collecting bets without a licence or a police authorisation as required under the national legislation, where such persons were unable to obtain licences or authorisations because that Member State, in breach of Community law, refused to grant licences or authorisations to them.
4. History and features of the Italian "Granting System"
The expression "granting system" means the system through which the AAMS grants third parties the licence to control activities and purposes related to betting on sports event or not.
The granting system was initiated in 1948 (16), and has over the years, undergone several amendments and modifications. The main important feature of the system regards AAMS and its functional purposes. AAMS can in particular sub-lease the licence to a third party, or a private society, thereby enabling this 3td party to exercise and control of a particular type of betting. This grant feature relates to sports events and other different games, such as numbers-based games.
This system, together with the limitations and restrictions coming from the criminal legislation (Act n. 401/1989) ensured that state monopoly on betting games was maintained until the ECJ decided to intervene. In order to observe and respect the European Community law as well as the ECJ case law, the grant system was amended in detail in 2006.
The legal relationships between AAMS and the society or party receiving the grant then became defined in depth in Act D.L. No. 223/2006, called the "Decreto Bersani). Under this Act, the parties (AAMS and the private society) are specifically required to stipulate a legal model contract, wherein the rights and obligations between them. are established. The new "grant system" is characterised by:
More betting agencies; less obligations and overall restrictions on who can organise and manage the betting games; less control and involvement from the State. (17).
Finally, we can say that the new granting system is directed to observe, respect and implement the European needs and solutions (18) as put forward in the "Gambelli" and "Placanica" rulings.
4.1. The New rules on the "granting system"
The introduction of the "new granting system" in 2006 has not solved all the legal problems Italy faces with the European Court of Justices decisions on betting. The D.L. No. 149/2008 contains rules aimed at implementing the statements and decisions from the ECJ. In particular, it:
Maintains the same concession for the game called "Lotto"; Establishes the procedural and economic rules for the selection of the new granter of betting on horse races; Creates a money fund for CONI and UNIRE in order to improve the quality and health of competitors., and establishes contractual and economic rules for the granting of betting machines such as video pokers etc.
5. The Administrative autonomy of the State-AAMS
The Administrative autonomy of the State-AAMS-manages the activities related to the regulation and control of the entire gaming market. AAMS was gradually assigned these functions of control as legislation in this sector continued to develop. At the same time, the AAMS carried on maintaining some of its more traditional responsibilities in the tobacco manufacturing sector (19).
The participation of the Italian Government in both the gaming and tobacco manufacturing sectors played a big rile in maintaining a balance between the collection of tax revenues and the safeguarding of other important activities of public interest like consumer protection and the fight against illegal gaming. Through its role in promoting business cooperation's and networking, AAMS has managed to create a significant pool of wealth and employment. in Italy as a whole.
The key role played by AAM in the gaming sphere involves the drafting of guidelines for purposes of ensuring the dynamic and rational development of the gaming. It also ensures that all the concessions licensed by it act in accordance with the rules and regulations. AAMS continues to compare and contrast up and coming illegal gaming practices in today's world, and takes foresees the maximum collection of revenues collected by the Government in this sector.
AAMS is in charge of collecting tax and excise duties in the tobacco industry, whose distribution, tariff and retail price it regulates. In addition to this, the AAMS carries out frequent operations to detect any tax evasions. Added to this is the responsibility to perform technical tests on the tobacco to ensure that its quality is in compliance with the Italian and EU standards and regulations.
Despite the State involving itself in this sector, both the public and private entities have in no way been exempted from taking part as well. The major objective which the State targets by participating through the AAMS is to ensure that the market is increasingly open and competitive and compliant with the regulations (20). This has been achieved through the joint cooperation between public and private sectors which has made it possible to guarantee a high quality offering for consumers..
AAMSs role in the gaming sphere has continued to expand, more so through its newly formed operation model of the public gaming market Under this model, the State continues to control and manage the infrastructural network while assigning the rights to market the games to a variety of subjects, who compete amongst themselves in delivering high quality services, thereby ensuring a safe and fully competitive market.
In essence, Italy can only triumph in its fight against illegal gaming if it adopts the twofold action plan of compliance and repression, which the AAMS has recently put into place. Through this action plan of compliance and repression, AAMS has directed its efforts towards taking preventive action through extending and improving its offers to the market with a view to putting it as close as possible in line with the hopes and expectations of consumers and the general public. At the same time AAMS has not relinquished its commitment to taking swift and effective repressive measures.
It is against this background, that the initiative launched in cooperation with the Italian Ministry of Communications regulates the technical procedures directed at blocking access to sites which offer gaming services without any concession or authorisation.
Besides prohibiting the development of the illegal gaming market, the adoption of clearly focused repressive measures has played a big role in curbing the undesired effects of service black-outs which are not directly linked to the provision of illegal gaming solutions. In addition, the information contained on the redirecting affected the dissemination of information related to gaming laws and the institutional role of AAMS. Public and consumer awareness of gaming and related laws has therefore increased tremendously thanks to the initiatives of the AAMS.
6. Cultural background
The AAMS has played a major role in the history of Italian legislation, not to mention the gaming industry.,
6.1. Historical background
AAMS is a creature of the economic system of state monopolies which were created to meet the publics need for security, order and social safeguards, while filling a regulatory role meant to guarantee the use and the enjoyment of primary needs. State monopolies were initially developed by the Greeks, who applied this system to olive oil, salt, papyrus, fishing products, mines and banks. Italy established its first monopoly in the minting of coins in the 1st century, extending it to salt, cinnabars, and mining products, as well as the services of heralds, barbers, cobblers and others, in the 4th century.
State and private monopolies (in the form of tendered concessions) then took over towards the middle age, minting of coins, in addition to producing and selling salt. Kings also distributed, at their discretion, monopoly-like privileges in the sectors of production, purchases and sales. One major private monopoly which was established in Italy in the 15th century was set up in Florence, by the Medici family to engage in alum exportation
Between the end of the 16th century and the middle of the 18th, monopolies prospered more or less everywhere: the State monopolised tobacco products, gun powder, chemical products and other items of mass consumption.
In 1862, the Italian State placed a monopoly on the production and distribution of salt and tobacco products in order to maximise state revenues from these economic activities. Since then the state has managed its monopoly over tobacco with the help of subsidiary bodies.
The exclusive concessions on salt and the monopoly on quinine were if great assistance to the public, as this was exercised on a nonprofit basis for social medical objectives. The monopoly on tobacco, on the other hand, has always been tied to changing social customs and to please the consumer, thereby making a noteworthy contribution to the satisfaction of the State's economic needs.
6.2. The projects and activities of AAMS
AAMS has forged its activities and identified itself through the history and culture outlined above as an institution which has played a central role at guaranteeing the production and distribution of goods and services in wide demand among the general public.
AAMS initially carried out its activities directly, by being solely responsible for the production of merchandise. It plays a slightly different role today; coordinating and controlling, those services typical to affluent societies, i.e. Gaming activities.
AAMS has always shown a special, ability to create value for Italy, in line with the times. This role was seen during both post-industrial and industrial Italy, and while it may appear less evident at present, in the so-called post-industrial Italy, in large part due to the fact that the momentous changes dealt with by this Administration are still quite recent, there can be no denying that the AAMS has already modified its identity, focussing the majority of its energies on its new role as the regulator of the gaming market, while introducing significant new developments in its traditional operations involving monopoly goods.
The social benefits produced new contributions which corroborate those which were traditionally provided by the AAMS and consist primarily of:
Fighting against illegal gaming, through supporting efforts to suppress it and through constantly improving the supply of public gaming activities;
Maintaining the trust of the general public and safeguarding the legitimate interests of consumers; Regulating the gaming market; Providing occasions for leisure time which act as diversions are compatible with broader interests of the individual and the general public.
We shall now assess the structure and composition of AAMS.
6.3.1. The Central Offices
The current organisational structure of AAMS was introduced in 2003, primarily in the sector of public gaming regulation.
The office of the Director General carries out the activities of directing and controlling, in accordance with the guidelines set out in the "General Directives for administration and management".
The Director General's Office is also responsible for the main institutional relations, the external relations and issues related to news and broadcasting organisations, thereby ensuring liaison with the Minister's press office.
6.3.2. The Excise Duties Department.
This department deals with the distribution of manufactured tobacco products. It is responsible for, among other things, granting administrative concessions in the manufactured tobacco sector and ensuring that smoking products comply with national and regulation of tax payments and the accounting of tax revenues.
Its organisational structure consists of a Director General's Office and four General Managerial Offices: the Strategic Department, the Gaming Department, the Excise Duties Department and the Department for the Organisation and Management of Resources.
6.3-3 The Gaming Department
It supervises the organisation and management of all games, oversees the management of gaming concessions, ensures that tax revenues are correct and regular and formulates directives and regulations. It also coordinates the procedures involved in granting new concessions by establishing guidelines in relation to their assignment and managing the relative public tenders.
6.3.4. The Department for the Organisation and Management of Resources
This office manages the human, capital, logistical and IT resources which are necessary to enable AAMS to carry out the role and tasks assigned to it. It is responsible for developing its IT system and its on line network. It defines the guidelines and procedures for managing its real estate, staff training, labour relations and collective bargaining negotiations.
7. Numbers-based games
7.1. Lotto and SuperEnalotto.
Lotto is a popular, traditional and customary Italian game. It has the potential of developing and meeting the requirements of the changing habits and psychological motivations of Lotto players, despite its lengthy history. A number of innovations were recently introduced, to it, including automated extraction, focussed extraction, the national draw ("ruota") and the third weekly extraction, while another brand-new feature, Instant Lotto, was added in 2006.
SuperEnalotto is another game invented in 1997. It involves foretelling the first numbers extracted in the draws of Bari, Florence, Milan, Naples, Palermo and Rome. The first number extracted in the draw of Venice serves as the "joker" number.
Fabulous winnings have firmly entrenched SuperEnalotto in Italy's collective imagination, such as the amazing record of 72 million euros set in 2005. Since 2006, the fans of SuperEnalotto have been using presented with a brand-new logo, a new playing sheet and a new optional, related game: SuperStar.
SuperStar is a new optional, tie-in game coupled with Super Enalotto. A random number between one and ninety is generated by the terminal at the moment the wager is confirmed, the number becomes the winner number if it matches the first number drawn on the national Lotto draw.
National lotteries are one of the oldest and most popular forms of traditional gaming in the world. They are associated with one or more historical, artistic or cultural events, or other types of local initiatives, and combine the diversion of gaming activity with the promotion of our country's artistic and cultural resources. The most important lottery in Italy is the "Lotteria Italia", which has been held since the i960's and given extensive media coverage. The draw for the winners is usually held on January 6 of each year.
In recent years, in line with changing lifestyles increasingly characterised by speed and immediacy, there has been a growing desire for immediate victory, regardless of the amount at stake.. This led to the creation of instant lotteries and drawings, known in Italy in the famously known name of "Gratta e vinci" ("Scratch and Win"), a title that summarises the mechanics of the game.
In the year 2003, they launched a third type of lottery. Tied in with the traditional lotteries, this new form of gaming utilises telephone communications.
It invlves the extraction of ninety numbers, and was introduced in Italy in 2001. It resembles the traditional "tombola" game played by Italian families from time immemorial. Bingo is played in specially equipped Bingo Halls that offer hospitality and entertainment services to promote friendly encounters and socialisation, thus making it a pleasant pastime.
One unique feature of Bingo from the other games relates to the individual behaviour of the participants and the distance, in terms of both space and time, between the moment when the game is played and the moment of the winnings. Since 2005, it has been possible to play Bingo through the creation of a single "virtual bingo hall" on a national level making for extractions that produce sizeable prizes even in the smallest "real" halls.
8. Games based on sports and horse racing.
This activity pools betting games based on forecasting sports results are time-honoured favourites in Italian popular culture, currently distributed through a vast and widespread network of betting points connected with the Totalisator, which registers all the wagers in real time and with the utmost security.
One such game goes by the name Totocalcio, which involves forecasting the outcomes of soccer matches (currently 124). From the moment it was introduced, in 1946, the game has been a fixture for all Italians, even those with less enthusiasm for soccer and less gaming ability, thus giving it a privileged place in the country's collective imagination. Innovative elements have subsequently been introduced: the Totogol game (in which the number of goals scored in each of the games listed on the betting slip must be forecasted), plus a new game, "9", coupled with Totocalcio.
The Totip pools game (based on horse races) is one of the oldest and most traditional games, still constituting a very well known brand. The Tris bet (in which the first three finishers of a race must be forecast) is a betting outlet game, played with a betting slip and aimed primarily at public affiliates, even though its widespread use and simplicity make it suitable for all players. In 2006, further new competitions were added under the name of "Ippica Nazionale" ("National Horse Racing").
In the past, bets were viewed as illegal gambling, though, as the government placed greater attention to its practice. This paved way for laws governing these activities, starting with betting on horses. Since 2002, all bets have been placed under the control of the AAMS.
Bets are placed on competitions involving Olympic sports (basketball, soccer, bicycle racing, downhill and cross-country skiing, tennis, sailing and volleyball), as well as motor sports (car and motorcycle racing) and horse races organised as part of the official programs of Italian and foreign racetracks.
There are traditionally two types of betting: totaliser-based and fixed rate. In the case of totaliser betting, "pots" of winnings are divided among those who have correctly forecast all the events being bet on. With fixed-rate bets, on the other hand, the bettor is playing against the "bank", managed by concession holders, with the outcome depending on the results of individual events or of a sequence of linked events. Winners are paid an amount equal to the wager, multiplied by the fixed rate at the moment the bet was made.
Also enhancing these offers are the new betting methods which have recently been introduced in the scene: "live" bets on sports events, meaning that wagers can be laid "during" the competition, until just before its conclusion (for example, up until the last lap in a motor racing event).
9. Gaming machines
They originated in Italy from the 1900's onwards,. In 2002; the Italian Parliament defined the "legal" types of machines and methods of play, also regulating the possibility of winning small sums of money. Gaming machines that do not provide winnings in money can be divided into two different categories, respectively characterised by:
The ability to receive an object as a prize (crane games, draws that require skill etc ...); Pure entertainment (video games and mechanical and electromechanical devices, such as billiards, table football, pinball etc ...).
The machines, known as "Newslot" are the only AWP machines authorised by the AAMS and are characterized for skill or entertainment elements combined with chance. The ongoing development of AWP machines is taking advantage of improvements in information and communications technologies in order to heighten the attraction of the machines while, at the same time, safeguarding the gamblers and the levels of revenue of legal operators. One of the most significant security features of the new machines is that they only function when connected to the AAMS computerized network, with any tampering leading to an automatic shutdown.
10. The performance of the gaming market.
The public gaming market recorded extremely positive results in 2006, confirming the effectiveness of the initiatives which were launched in 2003. This slowly popularised the gaming portfolio and the rationalization of sales network. The sector has reported a turnover of over 35.2 billion euros. This is an increase of about 24% on 2005, and of 127% when compared to 2003.
At the same time, tax revenues from games have reached 6.7 billion euros (+9% up from the 2005 revenues and + 91.7% compared with the revenues recorded in 2003). this result, becomes considering the fact that the average rate of taxation on gaming has dropped from 28% in 2002 to 19.1% in 2006, and that the risk for the Treasury has decreased significantly, owing on the one hand to the diversification of revenue sources (56% of the total turnover of this sector came from the Lotto in 2002) and on the other, to the shift-for what concerns revenues-to games that have by their very nature more stable trends (the gaming machines), once they have fully established themselves on the market.
In general, the Italian State does have some form of control over the laws on betting in sports events, and through its laws, Article 4 of the Act No. 401/1989, imposes criminal sanctions on persons who engage in betting activities without licences and police authorisations. But these regulations, as we have seen, have been ruled as being contrary to the EC laws on freedom of establishment and provision of services.
Through the AAMS, Italy is slowly streamlining its laws on betting and gambling in order to involve both the public and the private community in these practices without unnecessary or complicated legal restrictions.
With the increasing popularity, internet access and creation of new games in betting, it is only a matter of time before Italy, with the help of more tranquilised legislations, maximises its income as a State from betting collections.
One important solution and recommendation for the progressive development of betting could be the creation of a "Betting Code", whose provisions combine the national, European and international law principles and jurisprudences.
A good example of a law with such principles and combinations is the English Gambling Act which enshrines the European principles on freedom of establishment and freedom to provide services.
The current Italian system legislation is entirely different from the previous provisions and has, through the "Decreto-Bersani" improved the possibilities of private companies to take over and manage sports betting through public tenders. This could more importantly create more competition and vibrate the entire Italian betting and general economic market.
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G. M. Ruotolo, Il regime italiano del gambling all'esame della Corte di Giustizia: rien ne va plus?, in Diritto pubblico comparato ed europeo, 2007.
E. Valsecchi, Appunti in tema di giuoco, in Riv. dir. comm., 1949.
E. Valsecchi, Giuoco e scommessa. La transazione, in Trattato di diritto civile e commerciale, 1986.
L. Zagato, Caso Gambelli: la Corte di Giustizia riformula il proprio giudizio sulla disciplina italiana in tema di scommesse, in Europa e diritto privato, 2005, I.
* Respectively, attorney at law, Rome, LLM in International Sports Law, ISDE Madrid; Professor of International and European Sports Law, Tilburg University, ISDE-IEB Madrid and Lawyer and an LLM in International Sports Law, ISDE Madrid.
(1) All the relevant information has been taken from the Italian AAMS' annuary (website www.aams.it/news/site.php?page=2006011215265996 )
(2) The above described definition has been taken from F. FILPO, Il gioco d'azzardo tra la direttiva dei servizi e la sentenza Placanica, in Contratto e Impresa Europa, 2007, II, 1016.
(3) See U. PIOLETTI, Il gioco nel diritto penale, Milano, 1970, 30.
(4) See V. Manzini, Trattato di diritto penale, Torino, 1948, X, 868.
(5) See S. Beltrani, La disciplina penale dei giochi e delle scommesse, Milano, 1999, 140.
(6) ECJ, Judgment of 6 November 2003, Case C-243/01, Criminal proceedings against Piergiorgio Gambelli and Others, ECR 2003, I-13031; see I. Zagato, Caso Gambelli: la Corte di Giustizia riformula il proprio giudizio sulla disciplina italiana in tema di scommesse, in Europa e diritto privato, 2005, I, 206.
(7) ECJ, Judgment of 6 March 2007, Joined cases C-338/04, C-359/04 and C-360/04, Criminal proceedings against Massimiliano Placanica (C-338/04), Christian Palazzese (C-359/04) and Angelo Sorricchio (C-360/04), ECR 2007, I-1891.
(8) See A. Montagna, La svolta della Cassazione sulla raccolta di scommesse ed allibratori esteri, una soluzione possibile, un pecorso non del tutto condivisibile, in Cassazione penale, X, 2007, 3653.
(9)ECJ, C-243/01 paragraph 46.
(10) See Case C-384/93 Alpine Investments, paragraph 22.
(11) This law provided for imprisonment for a period of between 6 months and 3 years.
(12) Article 88 if the Italian Royal Decree required No 773 required applications to be filed before the Italian policefor licensing and authorisation to carry out betting activities.
(13) Paragraph 49 of the decision.
(14) Reference was made to Case 5/83 Rienks  ECR 4233, paragraphs 10 and 11.
(15) See paragraph 70 of the decision.
(16) Before the institution of the " granting system " the Italian State managed all the betting games as a monopolist.
(17) See A. Corrado, Commento alla sentenza Gambelli, in Guida al diritto, 2003, 97.
(18) In that direction G.M. Ruotolo, Il regime italiano del gambling all'esame della Corte di Giustizia: rien ne va plus?, in Diritto pubblico comparato ed europeo, 2007, 1399.
(19) The relevant information and data concerning the AAMS as reported in the present articles has been taken from the AAMS website, www.aams.it (visited on 11 February 2009).
(20) See E. De Feo, La privatizzazione dell'Amministrazione Autonoma dei Monopoli di Stato, on www.filodiritto.com/diritto pubblico/amministrativo/privatizzazionemonopolidefeo.htm
by Felice Antignani, Michele Colucci and Felix Majani *
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|Author:||Antignani, Felice; Colucci, Michele; Majani, Felix|
|Publication:||The International Sports Law Journal|
|Date:||Jul 1, 2009|
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