H2GC: Italy’s brand exodus hasn’t slowed growth or pushed players offshore

Nine months into 2026, Italy looks less like one gambling market than two. Online casino has just posted its best September on record, rounding off a nine-month run in which gross win reached €2.7bn, up 15% on the same period last year.

Over the same months, betting shops produced their weakest August since 2016, gaming machine revenue continued to slide, and the reform intended to give the retail network a clear future was taken off the government’s agenda.

H2 Gambling Capital now forecasts total regulated Italian gambling gross gambling revenue (GGR) – retail and online – of €22.5bn for 2026, up 2.2%, with the vast majority of that growth coming from a single channel.

The new online regime passes its first test

This is the first full year under the online licensing framework introduced by Legislative Decree 41/2024. Last November, more than 300 domains were consolidated into 52 concessions held by 46 operators, each paying €7m for a nine-year term, and some recognisable brands, including Betway and Unibet, chose not to continue. A new self-exclusion system followed on 1 February, allowing players to exclude themselves from individual products or from all gambling, for anything from seven days to indefinitely.

The concern was that fewer brands, higher fees and tighter player protection would slow growth or push players offshore. So far, neither has happened. Online casino has grown by double digits in every month of 2026, and we expect it to reach €3.72bn for the full year, up 15%. Poker (€195m) and bingo (€75m) are each on course for growth of around 7%. Crucially, our model shows the onshore share of online betting and gaming edging up to 90.5% this year, from 90.2% in 2025. Italy is one of only a handful of markets able to celebrate channelisation going in the right direction, however modestly.

Sports betting: turnover up, margin down

Sports betting has been the volatile one. January set a record, with gross win of almost €330m, before results swung firmly in punters’ favour. August was the extreme case: turnover rose 4% to €1.44bn, yet margin fell to 7% from 18% a year earlier and gross win dropped 60%. July, by contrast, was the shops’ strongest July since 2020, as Italians bet heavily on a World Cup their own team had failed to reach.

After nine months, sports betting gross win stands at €1.9bn, down 4%. Online is broadly flat at €1.22bn; the shortfall sits in retail, down 9% to €682m. We have cut our 2026 onshore sports betting forecast to €3.47bn, up around 1%, with online now expected to grow 2% rather than 7%. The underlying picture is healthier than the headline, however. Turnover is growing and margin swings even out over time. Players have not gone anywhere; bookmakers have simply had a run of bad results.

Retail: a slow decline without a plan

Gaming machines remain Italy’s largest single product, but they are shrinking. First-quarter gross win fell 4%, and we forecast €7.57bn for the full year, down 3%. Government receipts tell the same story: Ministry of Economy and Finance (MEF) figures show gaming tax revenue fell 6.3% to €3.64bn in the first half, with machine receipts down 7.3%. Part of this reflects the continued shift to online, where the effective tax burden is lower.

Rome remains the biggest variable

If online now has regulatory clarity, retail has the opposite. In early August the prime minister’s office rejected the draft decree to reorganise land-based gambling after two years of negotiation with the regions, chiefly over minimum-distance rules, and the enabling mandate expired on 29 August.

Betting, bingo and gaming machine concessions are due to expire on 31 December, and the MEF is reported to be considering a three-year extension to the end of 2029 to raise €400m–€500m for the 2027 budget. That would give operators continuity, but not the modernisation the network needs.

Advertising is the other open question. Italy’s failure to qualify for the World Cup revived calls to unwind the 2018 Dignity Decree ban on gambling advertising and sponsorship, yet an opposition bill tabled in July seeks to tighten it further. Our view is that operators should plan for the status quo.

The outlook to 2031

Looking further ahead, H2 forecasts total Italian GGR of €27.3bn by 2031, which would be a compound annual growth rate of 3.4% from 2026. Onshore online betting and gaming is expected to grow from €5.98bn this year to €9.19bn – an annual rate of 9.0% – accounting for around three-quarters of the market’s growth. Online’s share of total GGR is forecast to rise from 29.6% to 37.9%.

Offshore activity grows more slowly, from €627m to €812m, so the onshore share of online edges up to 91.9%. Land-based gaming, including machines, is forecast to fall from €8.16bn to €7.90bn. Italy’s online market is showing that a tightly controlled, high-cost licensing model can still deliver strong growth and keep players onshore. The question for 2027 is whether Rome can give retail the same certainty.

Letting the data decide

The online market’s momentum is exactly what the operator performance award at the EGR Italy Awards 2026 is designed to capture. Unlike the other categories, it has no judging panel and no entry form: the winner is decided purely on H2’s tracking of the Italian online market.

We measured every operator in online casino, sports betting and poker over the 12 months from August 2025 to July 2026 against the year before. They were judged them on four things: how much market share they gained, how fast they grew compared with each product market, how consistently they gained share month after month, and the scale at which they did it.

In a market with fewer licences and no advertising, those are the measures that separate the operators pulling ahead from the rest. The winner is announced at the awards ceremony on 20 October 2026.

Josh Hodgson joined H2 Gambling Capital in 2015 as a data analyst and progressed to the role of COO following his instrumental advancement of the company’s data and regulatory services over the course of 11 years.

He has an academic and applied background in data analytics and drives the continuous development of H2’s intelligence resources. Hodgson oversees H2’s coverage of over 150 markets worldwide from both a data and regulatory perspective to deliver accurate, up to the minute intelligence on the global gambling market