Italy’s Agency of Customer and Monopolies (ADM) has caused uproar in the esports community by shutting down three ‘digital entertainment venues’ located in the North of Italy. 

The government agency that oversees gambling policies across Italy’s 20 regional provinces shut down the ‘three gaming halls’ that were deemed to have ‘lacked any form of authorisation, licence and concession’.

The venues hit back at the ADM’s decision, outlining that they were part of a ‘local area network’ in which their halls offered ‘gaming with home entertainment devices without any cash prizes.’ 

The ADM had acknowledged to local media that the gaming halls had been compliant with relevant taxes and applied premises rules to check underage customers.

It later be revealed that the ADM’s enforcement was a result of a complaint issued by Sergio Milesi, Chief Executive of Italian amusement arcade operator LED SRL. 

The arcade operator had warned the ADM that esports venues such as Bergamo’s Esports Palace, one of the e-halls shut down, had infringed on Italy’s commercial laws to operatee adult entertainment venues. 

Of distinction, Milesi and LED SRL highlighted that the e-halls operated a ‘fixed subscription entry’ for esports patrons to play at their venues – deemed an ‘unfair competitive advantage over traditional establishments’ that could not offer their patrons the same incentives. 

Milesi, owner of several Italian amusement arcades, therefore considers eSports halls as a form of ‘unregulated and untaxed competition’ in direct contrast to his arcade venues are forced to adhere to ‘numerous regulatory controls’.

The complaint outlined that esports venues should not be allowed to operate until the ADM defines a clear legislative framework for how esports retail properties should be operated in line with existing highstreet laws.

The closed venues responded that Milesi’s complaint was purely self-serving in the interest of  LED SRL to stifle competition, in which the company is biding its time to launch its own esports entertainment properties.

Italian esports stakeholders will now wait for the ADM to decide how it will interpret commercial and retail laws applicable for esports venues to adhere to. 

“The hope, however, is that both Parliament and the regulator can understand the interpretative error and promptly take a position on the rules applicable to esports, clearly excluding the ones that regulate amusement machines without a cash prize,” stated Giulio Coraggio, Head of Intellectual Property & Tech practices at law firm DLA Piper. 

“Any different decision would risk damaging a market that is quickly growing, generating new jobs, new businesses, and consequently contributing to the growth of our country’s economy.”