A bill to liberalize the on-line betting market in France is due to be brought before the French parliament in early October.
The opening of the on-line sports and horse race betting markets, including the online poker market, is likely to become effective by mid 2010 - operators are hoping this will be in time to get a share of the June 2010 football World Cup in South Africa. The passing of the bill would enable sports betting and poker to be offered in France by approved foreign, principally European, online gambling companies, subject to an application and approval process implemented by a new regulatory body entitled ARJEL. ARJEL expects to handle about one hundred licence applications in the initial months. On-line casinos and other games of pure chance are not included in the present legislation.
In the proposals published earlier this year the tax was envisaged to be 7.5% for online sports betting and 2% on poker profits, but now the tax rates are to be discussed in parliament first before the actual level is set. Last week France announced that it was addressing issues raised by the European Commission (EC), whose concern most recently has appeared to be more one of consumer protection than opening up markets to competition. However, in response to EC concerns France has dropped an earlier requirement that on-line operators should have a physical presence in France.
The European Gaming and Betting Association (EGBA) continues to object to, among other things, the maximum payback ratio of 80-85%, which would weaken the competitive edge of the online industry but is unable to say whether the legislation has been modified sufficiently to comply with EU law until more detail has been published. It focussed its criticism on the proposed setting up of a 'sports betting right' to enable sports' organizers to charge licensed operators, ostensibly for the sake of 'preserving integrity'.
The French gambling market is a lucrative market by any standards. According to a survey prepared by consulting firm MECN and law firm Ulys, in terms of turnover, the total licensed gambling market (including casinos) in France reached nearly EUR70bn in 2008; in gross revenue terms it was EUR8.5bn. Horse race betting is a mature market in France, but sports betting and poker offers the greater potential for future growth, being at the infant stage. MECN expects that in terms of gross revenues (turnover less payout of prizes and winnings), the French online gambling market will grow by a factor of nearly six from the present EUR300m to about EUR1.7bn by 2015.
A comprehensive report in our Intelligence Report series examining the new possibilities that offshore e-commerce open up for business, and analysing the offshore jurisdictions that have led the way in offering professional e-commerce regimes for international business, with a particular focus on e-gaming, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report6.asp
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