Italy Targets Illegal Gambling Through Cyber Controls

Italy Targets Illegal Gambling Through Cyber Controls

Italy is setting the stage for another shift in its gambling regulatory framework, this time turning to cybersecurity as a tool for limiting unlicensed activity. Provisions within the new Budget Law outline a plan that would oblige businesses offering public internet access to install blocking software, cutting off connections to unauthorized gambling sites.

The proposal, spearheaded by the Ministry of Economy and Finance (MEF), entrusts the Customs and Monopolies Agency (ADM) and the state-owned IT provider SOGEI with developing the technological system. Once implemented, the software would form part of the country’s strategy to reduce the visibility of offshore and unlicensed platforms in spaces where public internet use is common, such as cafés and kiosks.

Oversight will remain firmly in the hands of the ADM, which will set the rules for how the system operates, while enforcement is to be led by the Guardia di Finanza. The financial police would not only monitor compliance but also issue fines to businesses failing to adopt the blocking technology. In cases where systems are deliberately configured to drive users toward illegal operators, more serious legal consequences, including potential criminal charges, could follow.

This initiative is closely linked to the government’s recent decision to grant new online gambling licences, each priced at €7m. Licensed operators have invested heavily in the regulated framework, and the government views stronger digital barriers against unlicensed sites as necessary protection for those investments. Officials argue that without such measures, illegal operators could continue to undercut the regulated sector, eroding both state revenues and consumer protections.

The proposal arrives in the wake of a notable legal development. Italy’s Constitutional Court recently overturned the Balduzzi Decree, which had imposed a blanket ban on the use of public terminals for gambling. Judges ruled that the decree was excessively restrictive and conflicted with the rights of businesses. Even so, the ADM maintains that devices configured to provide direct access to gambling sites remain unlawful under existing statutes. The new cybersecurity system may be interpreted as a middle ground, limiting access to illegal gambling without outright prohibiting the use of public terminals for lawful purposes.

Italy’s struggle against unlicensed operators has persisted despite a mature regulatory framework. Offshore platforms often attract customers with promises of greater choice or fewer restrictions, but regulators contend that such sites leave players without safeguards or guarantees. By focusing on digital prevention rather than physical restrictions, policymakers appear to be adjusting their approach to the changing realities of online gambling.

The success of the initiative will likely depend on several factors, including the efficiency of the blocking software and the degree of cooperation from businesses. Internet providers in public venues may face additional responsibilities, such as system updates and compliance checks, which could introduce costs and operational challenges. On the other side, questions remain about how effective domain-blocking technologies can be, given the widespread availability of tools such as VPNs that can bypass restrictions.

Internationally, debates around the effectiveness of blocking measures are ongoing. While some jurisdictions have reported reductions in access to unlicensed platforms after adopting similar approaches, others have found that motivated users often find alternative pathways. Italy’s attempt to create a state-managed software solution suggests a desire to centralize control and reduce loopholes. The ADM and SOGEI will therefore carry significant responsibility in ensuring the system is practical, efficient, and adaptable to evolving online practices.

Beyond enforcement, the move reflects Italy’s attempt to maintain equilibrium between consumer protection, business rights, and state revenues. By avoiding outright bans on internet-enabled devices, the government sidesteps accusations of heavy-handedness, while still taking concrete steps to protect the regulated gambling market. The challenge lies in balancing these priorities in a way that secures the interests of all stakeholders.

If successful, Italy’s cybersecurity-based system could become an influential model in Europe, where many regulators face similar challenges. However, its impact will not be measured solely by its technical performance but also by its ability to foster compliance among businesses and to convince consumers to remain within the licensed system. The coming months will reveal whether this legislative and technological shift can effectively reshape the boundaries of Italy’s gambling market.