Compliance of social games with Italian law is still an open issue for many operators from what I understood during the EiG in Barcelona last week. And indeed there are a number of regulatory issues to take into account.
Article 718 of the Italian criminal code punishes with the imprisonment up to 1 year and with € 209 of fine the offering of gambling activities in public places or in places open to the public and Article 721 of the Italian criminal code prescribes that gambling activities are those carried out:
- with the purpose to gain profit and
- where the circumstance that the winning or the loss are totally or almost totally depending on the chance.
Moreover, Article 4 of Law 13 December 1989 No. 401 sanctions with the imprisonment from 6 months to 3 years the organization, performance and offering of any land-based or remote game set up or regulated by the Italian gambling authority, AAMS, without the required Italian gaming license.
Also, what is more interesting is that both the Italian criminal code and Law 401/1989 provide criminal sanctions also for players participating to such games. Additionally, article 4.2 of Law 401/1989 sanctions whoever advertises illegal gambling activities. Hence it is crucial to assess whether a social game can fall under the unmbrella of criminal law provisions banning illegal gambling activities.There is no single answer to such issue and a lot depends on how the game is structured, whether there is any payment by players (e.g. in the case of virtual currency or , whether players or operators gain any sort of profit through the game (e.g. the possibility to play longer on the platform), whether it is a skill game or a game of chance etc.
The most recent Italian case law which is mainly focused on land-based videopoker games provided guidelines on the interpretation of “profit”. Also, prize competitions run in connection with social games have been recently requalified in some instances as offering of gambling games coupling prize competition’s sanctions that are up to € 500,000 with the above mentioned penalties for the offering of gambling services. Furthermore social games in any case need to comply with advertising regulations whose breach is also sanctioned with fines up to € 500,000.
As anticipated, it is likely that Italian authorities will be more aggressive against the unlawful offering of games and therefore a case by case review of compliance of social games with Italian law is recommendable. In this respect, feel free to contact me, Giulio Coraggio (email@example.com), should you want to discuss the above.