Italian esports set to be regulated following controversial venue closures

The Italian government is seeking to officially regulate and recognize esports, according to Italian Undersecretary for Finance Federico Freni.

The decision comes shortly after Italy’s esports community was rocked on April 29, when the local Customs and Monopolies Agency (Agenzia delle Dogane e dei Monopoli) seized all equipment from multiple venues. games and esports across the country.

Esports Palace is a LAN center in Bergamo, Italy. Image credit: Esports Palace

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The reason given publicly by the Agency for the seizures was that the companies involved did not comply with Italian regulations. However, current Italian regulations classified LAN video game equipment as iGaming equipment such as gambling, slot machines and arcade machines.

According to Customs Agency, only three sites were closed on the 29th. However, this caused widespread panic as fines of between €5,000 and €50,000 (~£4,200 and £42,000) per seized equipment can be issued by the Agency. As a result, many companies shut down their gambling operations to avoid being affected. Esports bars may continue to offer catering services, however, these establishments were temporarily restricting patrons from playing video games.

The Agency’s decision was would have motivated primarily by slot machine business owners, who questioned why LAN rooms and esports bars that provide gaming hardware as a service were not taxed or registered under the same terms. This has resulted in the seizure and classification of gaming PCs, consoles, peripherals and even driving simulators as non-regular equipment.

On May 3, members of the Italian Chamber of Deputies Luca Carabetta and Daniele Belotti, as well as Senator Simona Pergreffi, were pushed by the community. In close contact with gaming and esports entrepreneur Alessio Cicolari, the individuals are said to have encouraged conversations in the Italian parliament for specific regulations for the market.

The result seems to be that specific esports regulations will be developed in the country.

May 4, Federico Freni, Italian Undersecretary for Finance, mentioned to the Chamber of Deputies: “The government reserves the possibility of taking into consideration the most appropriate regulations, in order to guarantee stable and effective regulations as soon as possible.

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Alessio Cicolari is the Owner of Esport Palace, a location in Bergamo, Italy, whose gambling equipment was seized. He spoke to Esports Insider about the dramatic seizure and subsequent political pushback.

“Yesterday I was not happy, but today I am. The lack of specific regulations has always been a challenge for us to promote events in Italy,” said Cicolari. According to the site owner, new esports-specific regulations will bring more investment to the scene, as brands and traditional entrepreneurs will now feel more secure about future esports funding opportunities.

“It was ‘one small step for a man’ but one giant leap for the stage,” he added.

Cicolari has still not specified a date for Esport Palace and other venues across Italy to fully resume operations. However, he expects that in the coming weeks an interim furlough will be granted while the government works on the regulations.

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Cicolari believes that the complaints raised by the owners of slot machines were not intended to attack and destroy video game establishments, but to protest against the regulations in force in the field of gambling. Cicolari, however, doesn’t think the strategy worked for them as nothing is expected to change in this market.

Cicolari also praised the community’s support throughout the scandal, which he sees as essential to the successful outcome. “The public, media, industry professionals and some politicians were really supportive. It was a union I had never seen before in the gaming and esports scene.

Esports Insider says: While the French president touts esports as the world of opportunity that it is, Italy’s old structures have acted to hold back its market. Fortunately, what started as a step backwards for Italian esports has turned into a much-needed opportunity to move forward. It’s a moment of change for Italian esports. The case is also a warning for other countries without clear regulations: in the short to medium term, this can significantly affect the industry.

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