Italy and France – will start-ups bother to get a licence?
The UK’ Gambling Act 2005 states its objectives as being:

(a) Preventing gambling from being a source of crime or disorder, 

(b) Ensuring that gambling is conducted in a fair and open way, and 
(c) Protecting children and other vulnerable persons from being harmed or exploited by gambling. 
All very laudable aspirations. The governments of France and Italy have adopted the same ideals in their new gambling laws but achieving these aims when the priority is to raise taxes due to budget deficits will be more difficult.
Illegal gambling in Italy for 2009 was estimated still to represent 30% of all gambling. The new law of 2007 was meant to reduce illegal gambling by providing the gambler with more legal gambling services, better protection, and improved gambling facilities.
In the first few years it was an apparent success but GBGC now detects that it is starting to unravel.
The starting point for a license in Italy is a bond of EUR 300,000 but it can be EUR 1.5 million for a start-up with no previous licence.
Such high costs create a significant barrier to entry particularly for the small operator and discrimination against the start ups will work against the state in a number of ways.
In the UK it has been the case that practically all gambling innovation has come from the independent, smaller operators. 
Due to its high start up costs, Italy will be starved of both technical and commercial innovation that small operators provide.
When the citizen is denied his basic right to choice of employment (for example in being able to set up a betting casino website – either because of high licence costs or prohibitive regulation) he will not take no for an answer. It is one of the reasons we choose to live in a democracy.
The same is true of the gambler who seeks value for money in his gambling, as with every purchase he makes. He would be stupid not to.
A similar point was taken up by Mark Davies in GIQ magazine this month.
He said, “Perhaps the Finnish and French governments take the view that their citizens are too stupid to find the gambling product they want through a web search.” 
So the very law designed to maintain probity will drive the gambler offshore to websites where the “About Us” section is no more than a sentence of platitudes and a PO Box address.
Sites licensed in the Isle of Man, Gibraltar, Alderney and Malta operate to the highest standards of probity, yet France, Italy and soon the rest of Europe will not recognise them and attempt to block access to them. So where will the gambler go and, more to the point, why would anyone coming into the business as an operator bother to get a licence at all?
The European governments are indirectly encouraging start ups not to get a licence through the regulation they are promoting. By not licensing the operator has no identity, no tax to pay, and is nowhere to be found – hardly something any government should wish to encourage. But when the regulatory aim is not only the three objectives outlined at the start of the article but a fourth which is to raise tax, the moral issues become clouded. 
The need for Governments to finance their debts is not in question. But the balance between taxing the gambling customer sufficiently without giving rise to illegal gambling is a very delicate proposition that has been wrestled with for decades.
The high tax models in both Italy and France will create a host of illegal operations. Imagine you were a high-rolling Internet punter who received a deal that was 30% worse by betting with a .fr site versus .com. Wouldn’t you bypass any state blocking of offshore sites and get a better price just by picking up the old-fashioned telephone (or even an iphone if you were up with technology) and call your bookmaker in Gibraltar or London instead?