Italy, Spain usher in new gambling regs

In Italy, the government is auctioning off 17,000 licenses for sports and horse racing betting at shops and other outlets. Companies have been invited to bid for the number of outlets for which they want licenses. Sports wagering will also be permitted online.

Remote casino gaming and brick-and-mortar casinos are also being regulated by Italy. More than 30 companies-- many of them bookmakers, including Betfair, William Hill and Unibet-— have already received licenses to offer remote gaming. Remote wagering on skill games and person-to-person betting exchanges is also being regulated.

The Spanish federal government has enacted legislation allowing sports betting in shops, retail outlets and online, and regional governments were given the ability to impose conditions as they see fit. Madrid's regional government published regulations outlining its licensing conditions last month. Unlike Italy, Madrid has established a fixed license fee and a limited number of licenses. But license holders can open as many shops and outlets as they please.

Britain's largest betting operators appear well-placed to take advantage of the opening markets. Gala Coral already operates an Italian-language Internet site and a betting shop in Genoa. Ladbrokes entered into a joint venture agreement with Italian firm Pianeta Scommesse in August and bought three betting shops in Turin last month. And William Hill is finalizing a joint venture with Spanish firm Codere after the European Commission announced last week that it would not oppose such a partnership.

"Essentially, this is a case of creating a new market or converting an illegal market into a legal market," said Nilay Patel, corporate finance manager for William Hill. "We don't have the facts, figures and information on which to make sensible estimates of the potential size of the opportunity.

"Until we actually have a couple years of operating experience in these markets, we really don't know how they're going to develop," he continued.

Italy had, until recently, resisted the notion of allowing foreign companies to offer Internet betting and gaming products to its citizens. The Italian Ministry of Economy and Finance had gone so far as to order the country's Internet Service Providers to block access to the websites of foreign betting operators in February. But when foreign betting operators complained Italy's policies violated European Union free trade laws, the country became one of nine Member States against whom the European Commission launched infringement proceedings.

Taking over in April, new prime minister Romano Prodi's government is ushering in far-reaching economic measures, including an early mini-budget intended to cut the country's deficit by more than 11.2 billion Euros. The gambling and betting industries are among the most substantially affected.