H2GC: Italy's online gambling market drove 2026 growth despite retail decline

H2 Gambling Capital has set regulated gross gaming revenue (GGR) in Italy at €22.5bn for 2026, a 2.2% increase with almost all of the rise coming from the online channel. The firm says online accumulated €2.7bn in gross win in the first nine months of 2026, a 15% rise versus the same period in 2025, and expects online casino to reach €3.72bn by year-end.

Online and the new licensing regime

2026 is the first full year under the licensing regime introduced by Legislative Decree 41/2024. Last November more than 300 domains were consolidated into 52 concessions held by 46 operators, each concession bought for €7m for a nine-year term. Recognisable brands such as Betway and Unibet chose not to continue. On 1 February a new self-exclusion system was implemented allowing players to exclude themselves from individual products or all gaming for periods from seven days up to an indefinite period.

Initial concern was that fewer brands, higher costs and stronger player protection would curb growth or push players to offshore operators. H2 Gambling Capital reports those fears have not materialised: online casino has grown in double digits every month of 2026, poker records €195m and bingo €75m, both growing at near 7%. H2's model also shows that onshore share of online gaming and betting rises to 90.5% in 2026 from 90.2% in 2025.

Sport and margin volatility

Sports betting has been volatile. January set a record with gross win of almost €330m; thereafter results swung to bettors' favour. In August turnover rose 4% to €1.44bn, but margin fell to 7% from 18% in the same month a year earlier and gross win dropped 60%. After nine months sports betting gross win totals €1.9bn, a 4% decline.

The online betting segment remains at €1.22bn, while retail contributes €682m, a 9% fall. H2 has cut its onshore sports betting forecast for 2026 to €3.47bn, roughly a 1% increase, and now expects online to grow 2% rather than the 7% previously projected. H2 stresses that turnover is growing and that margin swings even out over time; the firm adds players have not left the market, rather bookmakers have suffered a run of poor results.

Retail: machines and a basket of challenges

Gaming machines remain the single largest product in Italy, albeit declining. First-quarter gross win fell 4%, and H2 forecasts €7.57bn for the full year, a 3% decrease. Ministry of Economy and Finance (MEF) figures show tax take from gaming fell 6.3% to €3.64bn in H1 2026, with machine revenues down 7.3%.

Part of the decline is explained by continued migration to the online channel, where effective tax burden is lower. The bricks-and-mortar sector is also left without the reform that was meant to give it a clear plan: in early August the prime minister's office rejected the decree to reorganise land-based gaming after two years of negotiation with the regions, mainly over minimum distance rules, and the enabling mandate expired on 29 August.

Concessions for betting, bingo and machines expire on 31 December; the MEF is studying a three-year extension to the end of 2029 to raise €400m–€500m for the 2027 budget. H2 notes that while that measure would provide continuity for operators it would not deliver the modernisation the land-based network needs.

The advertising question remains open. Italy's failure to qualify for the World Cup revived calls to unwind the advertising and sponsorship ban introduced by the Dignity Decree of 2018, while an opposition bill filed in July seeks to tighten it further. H2 recommends operators plan for the status quo.

Outlook to 2031

H2 projects total Italian GGR of €27.3bn for 2031, implying a compound annual growth rate of 3.4% from 2026. Onshore online gaming, which H2 places at €5.98bn for 2026, would rise to €9.19bn in 2031, a 9.0% annual increase, and would account for roughly three quarters of the market's growth. Online's share of total GGR would climb from 29.6% to 37.9%.

Offshore activity would grow more slowly, from €627m to €812m, so onshore share of online would scale to 91.9%. Land-based gaming, including machines, would fall from €8.16bn to €7.90bn.

EGR Awards and H2 methodology

Online market performance is the basis for the operator of the year award at the EGR Italy Awards 2026. Unlike other categories, this award has no jury or entry form: the winner is determined solely from H2's tracking of the Italian online market. H2 measured each operator in online casino, sports betting and poker over the 12 months from August 2025 to July 2026 versus the prior year. Criteria were: how much market share was gained, growth rate versus the product market, monthly consistency in share gains and scale of that gain. The winner will be announced at the ceremony on 20 October 2026.

Josh Hodgson joined H2 Gambling Capital in 2015 as a data analyst and rose to COO after 11 years contributing to the development of the firm's data and regulatory services. Hodgson oversees coverage of more than 150 markets worldwide from a data and regulatory perspective.

H2 Gambling Capital concludes that the Italian online market shows a costly, regulated licence model can generate growth and keep players onshore. The question for 2027 is whether Rome will provide the land-based network the same certainty that online already has.