fRench whine The French have offered Europe’s first case-study of how not to legislate for a
fair online gaming sector, though it has secured the future of its own state-run monopoly, which might have been the plan all along.
FRANCE has always been a severely regulated market with very little to interest to the majority of gaming operators looking in from the outside. Since the 16th century a law passed by King Francois I meant France’s successive governments have managed to maintain a strict monopoly on the lottery and sports betting industry. Privately owned casinos have operated under close scrutiny and have been highly taxed whilst betting on horse racing has been a monopoly of the Pari Mutuel Urbain (PMU) and lotteries have been a state monopoly. In 1976 the lottery was replaced by Francaise des Jeux (FDJ) which in addition to the national Loto now has the monopoly on sports gambling (except horse racing).
Although this ‘closed shop’ attitude of the French has left many doors firmly shut it has however also left many gaming operators itching to enter the market. And in some ways they did.
In recent years the country has been undermined by the emergence of offshore gambling companies. Prior to the law 75 per cent of stakes on the internet from France were registered on illegal sites.
In 2002 FDJ began to offer online sports betting but was hampered by competition from offshore rivals which paid lower taxes. And so the company only managed to gain a five per cent market share in France’s €1bn online
fdj BeGan to offeR online
spoRts BettinG in 2002, But only
manaGed to Gain a five peR cent
maRket shaRe of the €1Bn fRench maRket.
sports betting market. This, coupled with pressure from the European Commission, meant the government started to re-look at the situation which led to the unveiling of its new online gaming regulations.
Initially the European Union covered the draft paper with lots of red ink and sent France back to the drawing board. Some of the issues included the restriction on the freedom to provide services and the use of names of sporting events, plus a ‘too low’ limit on payout ratios.
The initial proposals were among the most restrictive in the European market and really aimed at protecting the PMU and FDJ
gambling monopolies. But it was blocked by the EU and France had to rework its regulations.
In May 2010 the French parliament approved the legislation ‘Opening Up to Competition and Regulation of the French Online Gambling Market’ and France released its online gaming law (2010-476) which would follow the lead of Italy and issue online betting licences to private companies.
Operators had to close down their internet sites whilst applying for licences even though FDJ and PMU could remain open. Application time took between two and four months.
Finally the monopoly of the state run groups was broken and this also happened to coincide with the FIFA World Cup soccer tournament in South Africa. A timely move, and one which generated revenues of €107m during that period alone, of which 70 per cent was on football betting.
The French regulations were aimed at not only cracking down on illegal betting websites but also answering the EU Commission’s demands to liberalise the online gaming monopolies.
As from this date online gambling sites can now officially accept French participants and they can now legally gamble online. Online gambling sites that operate in France are
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