France's New Online Casino Rules

April 16, 2010 | News Category: Gaming Law

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Much talked about in the news has been France’s online gambling laws that have been heavily debated in both France and the rest of the European Union. France did not want to open up their gaming market, preferring to keep their income from their online gambling monopoly, Francaise de Jeux.

After much pressure from the European Commission, France has agreed to open their borders to foreign online casino operations, however, there are some very strict rules that apply. These rules make it quite difficult for competitors to run successful businesses, although there are those that will certainly try to do so.

The taxes being charged are high, and certain regulations restrict the type of online gambling business that can be conducted. For example, the new laws do not allow any online casino versions of the games roulette, blackjack, and lotto, since the French monopoly is still being given total control over these two games. These online casino games are those that are fairly low risk to online casinos.

Bookmakers have complained about the tax of 8.8 percent in order to run sports betting operations. The operators of these companies say that the 8.8 percent is simply too high to turn a decent profit, although certain companies still feel it is important to get into the market despite the high taxation. Isabelle Parize, the vice chairman of Mangas Gaming, said "We won’t make any money at first. But first-mover is important in this market so we’re there."

It is expected that the French government will review these laws in about 18 months time, at which time, there is a chance that taxes could be lowered. This would make it worthwhile for those that get in at the beginning, since they will already be licensed to operate in France. In Italy, online gambling taxes were also high in a similar situation, although the taxes were lowered by the Italian government when it was seen that many bettors did not make the move to legal online gambling sites because the cost was too high. At this time, one does not know how many French online gamblers will in fact switch over to legal online gambling sites now that there will be more choice available.

The European Union Court of Justice has not found that the current French online gambling laws comply with the European Union’s laws. There are a number of EU member countries that have not opened their borders as far as online gambling is concerned, thus not fulfilling the EU free market requirements. Because the European Commission is dealing with so many non-compliant countries, they have been a bit slow in their response.