• Gambling Taxes in Italy See Big Jump, Playtech's Earnings Fall

    30 December 2018

    Gambling taxes in italy see big jump playtechs earnings fall

    The taxes that gambling operators and software companies have to pay in a given jurisdiction are one of its biggest expenses. This means that even a relatively small shift in those rates can cause some major changes in what can be expected for business. This has recently been the case in Italy where their Senate has been working on a proposed budget for the following fiscal year, and this budget includes some unexpected increases to the taxes on gambling businesses.

    Playtech Feeling the Effects

    Playtech is one of the companies feeling the pressure from this surprise bump. Their stock actually dropped about 7 percent on news of this increase, which is critical because it's estimated that it's going to cost them upwards of €20 million in 2019 before any measures are taken to weaken the damage. This news is particularly relevant for this company in particular since they spent around USD $1 billion earlier this year to purchase Snaitech, which gave them a particularly large foothold in Italy.

    Some of the Rate Increases

    Online casinos have seen their tax rate jump from 20 percent to what's expected to be 25 percent. While 5 percent in absolute terms might not seem like that much, it's actually 125 percent of the taxes that they would have been paying previously. For example, if a company was paying €10 million in taxes before, they would be paying €12.5 million in taxes afterwards, which is 125 percent of the amount they were paying previously. A 25 percent jump in the largest expense that a company has is pretty big, especially when it comes as a surprise.

    Is Italy Shooting Themselves in the Foot?

    Whenever a tax on a particular industry shoots up like this, one of the effects is that it lowers the number of companies active in that industry. This happens because there will be companies unable to turn a profit with that large jump in expenses, and they will exit the market as a result. What happens as they exit the market along these lines is that the money they were previously contributing in taxes is no longer there, so Italy will not be receiving as much in increased revenues as it might initially seem, which can be self-defeating.

    Sources

    Steven Stradbrooke, Italy's Gambling Tax Hikes to Do Damage to Playtech's Earnings calvinayre.com, December 25, 2018

    Related News

    • Take a piece of the dream drop jackpots action

      Gambling News

      Take a Piece of the Dream Drop Jackpots ActionIvan Stefanovic02 April 2022

      Relax Gaming (RG) prides itself on being an inventive iGaming aggregator and supplier of unique content. With that in mind, it should come as no surprise that the supplier has unveiled an excellent addition to its sophisticated selection of online casino solutions. The new addition, Dream Drop Jackpots, has the potential to revolutionize slot games. Revolutionizing Gameplay

      Read full article
    • Pragmatic play strengthens its bingo offering with latest jackpot feature

      Gambling News

      Pragmatic Play Strengthens its Bingo Offering with Latest Jackpot FeatureIvan Stefanovic05 October 2021

      Pragmatic Play has further expanded its bingo offering by releasing a new jackpot feature. The recently launched product is called Drop Pots and includes a progressive group of online jackpots. Drop Pots includes 3 different jackpots with different offers. It is only available in a special web room that aims to provide online gaming providers and players an exceptional and exciting environment that is unique to the market.

      Read full article
    • Red tiger gaming launches dynamite riches

      New Online Slots

      Red Tiger Starts a Gold Rush with Highly Volatile Dynamite Riches SlotNikola Djordjevic22 November 2019

      Game developer Red Tiger has just released an explosive new offering themed around gold mining. The 5x4 game with 20 paylines asks players to light dynamite fuses so they can activate persistent upgrades that will truly help them strike it rich. The developer is promising guaranteed entertainment with this new release because of four different upgrades that change the conditions on the reels to be more favorable to the player and the Gold Spins round that serves as the extra spins mode.

      Read full article