The supremo's sibling, an AC Milan vice president who is also known for being the publisher of right-wing newspaper Il Giornale in Italy, made the controversial remark during a rally led by the former Prime Minister's People of Freedom political party in Lombardy.
After addressing members of the public in the audience, he encouraged them to attend Milan's match against Udinese at San Siro -- which the Rossoneri eventually won 2-1 courtesy of goals from the striker.
"Let's go and watch our household's little n***** [playing]," he said to laughter. "The girls here are all invited as well. They have the chance to meet with Silvio Berlusconi."
The incident comes just after Balotelli's Milan teammate, Kevin-Prince Boateng, halted a friendly match against Pro Patria after being racially abused by the Lega Pro side's supporters. Even more recently, American Jozy Altidore was the subject of racist taunts by supporters of second-tier Dutch side FC Den Bosch.
This latest matter is another race controversy that could be about to boil over following last season's episodes in the Premier League that saw Luis Suarez and John Terry garner negative press for their alleged discriminatory acts towards Patrice Evra and Anton Ferdinand, respectively.