The draft law aimed at setting out the new Italian remote gambling framework in Italy might ban white labels, but let’s explore it in more detail. 

Firstly, what are white labels? White labels are functional online gambling platforms or websites developed by specialist providers that are sold to investors and businesses who can then easily brand / skin the product. This allows them to rapidly enter the gambling market without having to develop their own online casino product from the start, saving them a lot of time and cost.

The Italian Parliament is currently working on a law that might be a game changer for the Italian remote gambling market. In particular, one of the most highly discussed provisions relate to the potential ban of white labels or skins.

Indeed, the bill provides the obligation of the Italian licensed operator to proceed to the “activation by the license holder, subject to authorization by the ADM and consistent with the specific technical rules established by the ADM, of an Internet site with a national top-level domain directly managed by the concessionaire, linked to its license and owned by the license holder, with the exclusion of the possibility for the license holder to make the reported site available to third parties with any technical or interface solution.”

The provision, in my opinion, is ambiguous because:

1. it does not clarify whether the Internet site must be unique or meet a minimum requirement; and
2. the prohibition of making it available to third parties would not apply in the case when the license holder would operate the site.

In the absence of further clarification, one solution enabling the establishment of white labels might be to assign the domain name to the license holder with a buy-back right at the end of the agreement with management autonomy of the skin to be granted to the license holder. This would give to the entity that wants to establish a white label a revenue share. Alternatively, operators might acquire multiple licenses but I see it as difficult with a cost per Italian gambling license of EUR7 million.

This provision is aimed at fighting the practice of having a large number of Italian gambling skins run under the same license. Indeed, the current licensing regime provides the ability to have an unlimited number of domain names linked to the same license, but players can only have a single gaming account per license.

We will see how the bill evolves, which has been highly criticized.