LAN-Gate: Esports Game Rooms Impounded in Italy

Posted on May 2, 2022 - Last Updated on May 3, 2022

Several LAN and esports arcades in Italy were forced to close following an intervention by the Customs and Monopoly Agency. Why did this happen? We’re here to explain what happened and the reasons that caused an immediate close of many popular esports game rooms.

Esports Palace: The first targeted LAN arcade in Italy

Through a video posted on both TikTok and Instagram, Esports Palace, located in Bergamo, Italy, shared what happened to them on the evening of April 29. The owner of the company Led S.r.l., Sergio Milesi, filed a complaint to Italy’s Agenzia delle dogane e dei Monopoli (the ADM) or the Customs and Monopoly Agency.

In the official filing, Sergio Milesi asked for clarity regarding the places defined as “digital entertainment parks”, better known as LAN or esports bars. Milesi’s request was carried out because, in LANs,  it is possible (by paying a fee) to utilize a series of home entertainment equipment for playing video games without any cash winnings. According to the complaint, this caused an unfair competition with traditional arcades, a business activity owned by Milesi, who specialises in digital entertainment centers (game rooms, bowling, etc.). It is worth mentioning that the dispute is not be associated with slot machines and similar products, but with the traditional arcade rooms.

Esports Palace Italy Lan Rooms Gaming
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The result of the complaint was a shutdown of all related activities that included the usage of consoles, racing simulators, and PCs. During that same night, the ADM forced Esports Palace to close all the gaming stations, turning the gaming room into a catering service only. All the gaming equipment was subsequently impounded.

Other LAN arcades affected throughout the Italian territory

Esports Palace was only one of the many gaming rooms that were forced to interrupt their activities. Pc-Teklab Gaming Center and Titan Gaming Center received the same treatment, while Ferrara’s WeArena (an esports center mentioned by Milesi in the complaint) found a way to continue their business. Nonetheless, most gaming centers that rented out equipment to the public were all targeted by public authorities, halting partially the esports industry in Italy.

What’s next for the Italian Esports Industry?

As of right now, most gaming centers will have to wait for further clarifications by public authorities. Essentially, Sergio Milesi’s complaint consisted of three main points that shed light on the current esports scene in Italy:

  1. The first is a lack of homologation of the platforms that are not certified and do not comply with the laws in force, as well as the non-compliance of PCs and consoles, which are categorized as home entertainment devices that shouldn’t be used in public;
  2. The second point is a lack of control by the operators regarding gambling activities that can be done via those electronic devices; and
  3. Lastly, the lack of commercial licenses for the for the use of video gaming equipment, which most of the time are bought and should be exclusively for private use, offered to the public.

Italy’s esports industry is suffering from the lack of a regulatory framework that can allow businesses to offer these kinds of activities. The shuttered gaming centers were operating in a grey zone where regulations were never created ad hoc for them.

Unfortunately, this sudden change caused huge losses to the owners and operators of LAN rooms in Italy. The biggest loss, however, is the Italian esports industry, as it shows once again that it will need time to catch up to the other European countries, such as France.

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Davide Xu

Davide is a university student trying to break into the esports industry! He's a League of Legends esports specialist who also has had some competitive experience in the amateur scene.

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