Grand designs: why Leadstar sees Italy re-regulation as opportunity not threat

As part of one of Europe’s largest and most established igaming markets, the Italian igaming sector has experienced its fair share of changes in both regulatory frameworks and the resultant market conditions over recent years.

In this shifting landscape, fast-growing international affiliate business Leadstar has remained steadfastly focused on striking the right balance between ensuring its platform remains compliant while also providing the strongest possible value to Italian users of its dot.it sites.

Key account manager Paolo Strano stresses that the company is “prioritising collaborations with operators that meet the new standards” with these collaborations “offering a safe, responsible betting experience”.

That’s not all of course. “Additionally,” Strano continues, “we’re investing in technology and content updates to reflect these changes in real time so users can always have accurate, up-to-date information about licensed betting sites.” In short, Leadstar is refining the consumer-facing offering in alignment with the new licensing requirements.

Price hike

One of the key components of the new licensing framework is the introduction of unlimited nine-year licences for Leadstar’s operator partners, with the 60-day tender window slated to open in November 2024.

With current dot.it licences due to expire at the end of December 2024, these new permits come with a hefty €7m price tag and annual fee levied at 3% of net margin, something designed to reduce the number of operators active in the market. According to Strano this will “likely result in a more competitive but high-quality market”.

The significant cost of entry, combined with the restrictions on the number of brands an operator can hold will, naturally, phase out smaller or less-established players.

Indeed, according to Strano the Italian market is set for a transformation. “With fewer operators, the landscape will become more competitive, but also more focused on quality and compliance,” he says. “This should lead to a safer and more reliable environment for bettors.”

The new environment fostered by the licensing framework will also be a positive for both consumers and operators as “those remaining will need to adapt and innovate”, according to Strano.

Harsher penalties

A key area where regulator Agenzia delle Dogane e dei Monopoli (ADM) will need to strike a balance is in ensuring that compliance is enforced without inadvertently driving players towards unregulated alternatives.

The player protection regulations are taking a consumer-first approach with a focus on responsible gambling. Measures taken include mandatory self-exclusion mechanisms, limits on betting and deposits and enhanced know-your-customer (KYC) requirements.

With the introduction of these stricter player protection measures operators will need to adapt quickly. Does Strano expect some operators to be hit with even bigger penalties for non-compliance than those seen in recent months with social media marketing breaches?

“Given the heightened regulatory scrutiny and the new technical requirements, it’s likely that non-compliant operators will face even harsher penalties moving forward,” he observes. “Non-compliance could result in significant financial penalties, which may push some operators out of the market.”

As a trusted marketing partner to these operators, Leadstar remains committed to transparency and quality and Strano is adamant that this focus will ensure the company continues to deliver value to both users and operators.

Balancing act

 However, there is also a risk that higher costs and more stringent requirements could push some players towards offshore-regulated operators active in the black market. Strano observes that it is crucial the ADM monitors this carefully and adapts the rules as needed to maintain a balance between regulation and market accessibility.

“The new website restrictions,” he notes, “will require operators to adjust their platforms. This could have a ripple effect on affiliates like Leadstar, as we will need to ensure that our content and recommendations align with these changes.”

However, he sees this as an opportunity to further enhance the quality and accuracy of Leadstar’s content. “Ensuring that we remain fully compliant while continuing to offer useful and transparent information to our users is our top priority.”

Is it possible that the new ADM regulations are too strict? Balancing acts are notoriously tricky and there is always the chance of falling off the high wire. Strano dismisses this though. “The intention behind the new regulations is sound, particularly in terms of improving player protection and market stability”, he says.

He does inject a note of caution though: “The increased costs and restrictions could unintentionally stifle competition. In an ideal world, I would like to see a more flexible licensing fee structure, perhaps offering lower entry points for smaller, compliant operators.

“Additionally, more focus on combatting the black market is essential. If regulated operators are pushed out due to costs, the black market could flourish, undermining the very protections the new regulations are designed to enforce.”

Business as usual

While operators reapplying for licences face a readjustment to the new conditions, and no doubt have started to explore possible efficiencies and cost savings to safeguard their margins, Strano is also confident that Leadstar will be largely unaffected.

“With the majority of our partners expected to remain in the market, we don’t foresee any major disruptions in our operations,” he notes. “Our platform is built to adapt and, while some operators may exit, this will also create opportunities to strengthen our relationships with those that stay.”

Strano’s confidence is to some degree based on Leadstar’s successful adaption to the blanket ban on gambling advertising in 2018, with affiliates forced to work within the narrowly permitted remit of ‘informative communications’.

As he notes: “Our approach at BookmakerBonus.it has always centred on organic growth through SEO and content-driven strategies [and] we’ve built our presence by focusing on educating users and providing insightful reviews rather than [by] relying on traditional advertising.”

Strano is even of the view that that the advertising ban plays to the strengths of Leadstar’s fundamental approach to igaming affiliation. “In fact,” he says, “it places even more importance on quality content and transparency, which aligns perfectly with our strategy of helping users make informed decisions based on licensed operators.”

Super future

While the Leadstar business has predominantly focused on developing great comparison products within the sportsbook landscape, Strano is also excited about Leadstar’s potential to grow in Italy via casino vertical.

The positive trend of its MiglioriCasinoItalia.it portal has helped it secure a foothold in this highly competitive niche, he reveals.

The opportunity is there, according to Strano, for its Italian-facing casino offering “to become one of the trusted portals to compare all licensed ADM online casinos”.

Adapt and thrive

The Italian-regulated igaming market remains a lucrative yet challenging environment for operators. Stringent advertising bans, high taxes and rigorous player protection measures continue to shape the operating landscape and influence how stakeholders approach profitability and compliance.

For future growth, operators and their affiliate partners will need to innovate, ensure compliance and focus on responsible gambling to thrive in Italy's evolving igaming sector. With the new ADM regulations playing to its perceived strengths, Leadstar sees itself as well positioned to take advantage.

Paolo Strano has been with Leadstar Media for over six years and is currently working as Key Account Manager focusing on commercial partnerships worldwide. Having started his Leadstar career as a website manager, launching the Italian project Bookmakerbonus.it in 2018, Strano has a great understanding of the Italian market and its nuances.

Cover photo by Giorgio de Angelis