Italian authorities are going from website blockades instituted with local ISPs through the AAMS, to a UK style regulatory and taxation regime.

As recently as February AAMS banned IP addresses of online gambling sites but now it appears that the goverment had a change of heart as of January 1, 2007, it will be legal for citizens of Italy to gamble online.

The Italian plan is apparently informed by the U.K. initiative when it comes to how the entities that do business in Italy are regulated. If a company does business with Italian customers, the government will stand to make a 3 percent tax on any gaming based revenues acquired by the company.

Such a radical change of direction begs the question, “Will operators be flocking to set up in Italy?”

What will be interesting to see is how the U.S. reacts, as it appears that their attempt to ban the industry to Americans will be rejected and therefore, maybe they will take the route of other countries such as Italy, and try to regulate the gambling instead of eradicate it.