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Regulatory Focus - France: ‘Les Trompettes de l’Apocalyse’
France’s current gambling laws and proposed amendments are complex to say the least. I hope to bring some light to this current situation and how it may affect you, particularly if you reside in France. Be aware that 7 April 2010 brought about an important update which I have written about.
French Gambling and Betting legislation is currently undergoing massive reform since the French government announced a draft regulation in 2007. This includes draconian measures such as banning their own citizens from using Betfair to place bets because they have deemed betting exchanges as ‘highly addictive’ and a ‘threat to social order’. I actually felt the same way when I backed a loser 1.01 horse at the last second. After I calmed down I realised it was my fault, not the exchange. Anyway…
The legislation is being challenged by the European Commission as only serving to protect the French State-Owned monopolies Française Des Jeux and PMU. Both these companies recorded €9bn in turnover in 2008.
What is Being Proposed
The online Games Regulations Authority (ARJEL), has been created to regulate remote gambling. ARJEL will have, amongst other powers, authority to block access to unlicensed poker sites by requesting from a judge an injunction addressed to Internet Service Providers, as well as request from the Ministry of Budget measures to block financial transactions of illegal online gambling operations.
The new legislation proposes to allow any online operators based in the European Union or European Economic Community such as Party Poker, PokerStars, Full Tilt and Betfair to operate within France under a French licence.
Once an operator obtains a French license, they will have to operate an internet website accessible through a first level domain with a ‘.fr’ ending. This implies that Non-French players will have to register under the ‘.fr’. website in order to be able to play with French players. This appears quite unrealistic and authories may ultimately ban non-French players altogether. Nevertheless, an ‘.fr’ site would severely limit the playing competition and prize money as players would no longer have access to the big weekly, monthly and annual tournaments, such as the Sunday Million, FTOPs and ECOOP. These tournaments would probably be more like single table Sit ‘N Gos! This seems to be heading down the same route as Italy, where PokerStars Italy only allows Italian players.
Politicians justify this by arguing that they could not otherwise control who gambles with French residents, and the residents must be protected at all costs. I guess that means protected from hyper-aggressive Scandinavian poker pros who play 15 tables a time for up to 8 hours a day.
To rub salt into the wounds of operators, all operators that want a French license must close all of their French players accounts when they apply. The application process could take anywhere from 3-6 months, during which time those players will have nowhere to play. This is completely discriminatory to the players, particularly as they lose all their frequent player points and rakeback deals. Once this time period elapses, the player can then create an account through the approved French portal for the company.
There is still a ways to go until this bill becomes law but from the way it is is drafted at the moment, it’s not good news for the poker economy and horrible news if you live in France. The bill will likely be made into law just after the World Cup.
Key Figures
- France has one of the biggest betting markets in the world with roughly 5% (3.25 million) of its 65 million citizens regularly bet online.
- 75% of all egaming in France is ‘illegal’, according to the French government.
- Gross gaming revenues of non-monopoly egaming: €200m-300.
- Key operators: apart from the monopolies, Unibet, Bwin, Everest Poker, Betclic
- Tax proposed: 7.5% on sports bets (plus additional 8% for governing body of horse racing) + 1% for sports development, 2% for online poker on gross profits.
Conclusion
The French government claims that the new legislation is the ‘protect the public from fraud and gambling problems’ and to ‘provide openness to the gambling industry’. From what I gather, the only thing this ‘nanny state’ wants to protect are its valuable monopolised gambling companies. As for openness, the aim of the legislation is to ban all non-French poker players and only accept players residing in France. This is the opposite of ‘openness’ from the looks of it but its only my interpretation.
Of course, this all comes down to the tax revenue that the French government stands to make in this lucrative and booming industry, particularly now that that the economy is struggling during a post-recession.
This is only reasonable. What isn’t reasonable is making French players wait up to 6 months to gamble again and when they do finding out that they have almost nobody to play against.
This is setting a dangerous precedent and Italy and Spain have passed similar legislation. Other European countries such as the Netherlands, Denmark and Germany are watching closely. Let’s just hope that they follow the UK’s example of regulating the gambling market and not France’s.
All in all, this new legislation can only mean a bad deal for the all players and in particular, the French. It’s no wonder the some of the French are calling this ‘Les trompettes de l’Apocalyse’, meaning ‘The trumpets of the Apocalypse’.
Alexandre Rotenberg & Simon Dehaney LLB, LPC
