France’s New Online Gambling Laws

After many months of drafting, submissions to the European Commission (“EC”), re-drafting and political argy-bargy, France’s long awaited new law designed to liberalise the online gambling market in that country has finally been passed.

On April 6, the French National Assembly voted on the draft Bill, and buy a majority of 299 to 223 passed it into law.  It faced strong opposition from the France’s political left, and is being lamented by anti-gambling lobby groups.  But it hasn’t exactly won the overwhelming support of the online gambling industry either.

RGA – “not compliant with EU Treaty”

One of the catalysts for the law’s introduction was pressure exerted by the EC who wanted adoption of an open market approach to online gambling, consistent with the EU Treaty’s freedom of services provisions.  The EC considered previous laws shielding state owned monopolies Francaise des Jeux and PMU from competition as protectionist in nature, and issued reasoned opinions stating as much.

But just how well the new law satisfies the EU Treaty has been questioned, particularly by the Remote Gambling Association (“RGA”). RGA Chief Executive Clive Hawkswood has strongly criticised the law, calling it a smoke screen that still protects monopoly operators and does little to promote fair competition.

“Our biggest concern is that this type of system is accepted by courts and the EU institutions as somehow a fair access system. It looks nothing like the Italian system for instance and runs roughshod over EU rules meant to provide operators access to EU markets. We hope the new Commissioner who oversees this dossier will continue to scrutinise this law and its negative effects on market access.”

The ‘Requirements List’ setting out criteria license applicants  must satisfy is a voluminous 37 pages presently, and likely to expand further while turnover taxes that will apply to successful licensees are substantial (some say cost prohibitive) – 7.5% for sports betting and wagering, and 2% for poker.  What about other casino games you ask? Well that’s the other thing  –  games of chance are not included.

Games of chance not included

Slots and other casino games (blackjack, roulette and baccarat included) were deemed too addictive and not included.  So while Francaise des Jeux will continue to offer Keno, Bingo, casino themed scratch games and of course lotto – all games of chance (and terrible returning ones at that), private competitors will be barred from this space.

The obvious implication for live casino play, is that live blackjack, roulette and baccarat will not be able to be offered by French licensed operators to French players.

Of course the usual ‘player protection’ rhetoric was cited as being the reason for taking this stance.  But the player protection argument wears thin when it is learned that the French Government and the ARJEL (the newly-created National Regulatory Authority of the French online gambling market) are rushing to get licensees up and running prior to the World Cup opening so they can get their snouts into the millions of dollars in betting turnover tax that will be generated from this event.

Another problem raised by this approach is that operators will need to get smarter about how that control player accounts.  Presently, a single login at Unibet, bet365, Ladbrokes etc gives you access to sports betting, poker, and casino games.  This will have to change  – meaning further compliance costs.

Big brands still positioning for license

Despite the onerous regulatory requirements, and infrastructure costs and turnover taxes that will apply, big brand operators are still positioning themselves for participation in the new regulatory regime.  Ladbrokes have JV’d with local pay-tv broadcaster Canal+ to get access to their subscriber database, while PartyGaming have done a B2B deal with PMU.