French Budget Minister, Eric Woerth, has placed his proposed legislation on on-line gambling before the Assembly's Finance Commission for scrutiny with a view to progressing to a full reading before the Assembly in September. The object of the legislation is to open up the market to competition. La Francaise des Jeux and PMU will, however, maintain their monopolies on offline sportsbetting - monopolies which date back to the nineteenth century. However the European Gaming and Betting Association is still opposed to important elements of the legislation.
The law envisages liberalizing three areas of online betting: sports betting, horse racing and poker; lotteries, scratch cards and slot machines are excluded. A new supervisory body, 'Arjel', would be set up to issue licenses for up to 5 years and advise sports ministers on the detail of regulation, including the technical requirements, the decisions on categories of sporting events suitable for gambling, other technical and financial controls, and controls on promotion in order to protect minors and discourage addiction. It is not yet clear whether France would recognize licenses issued in other EU countries in accordance with its obligations, but in a speech in the Assembly, Etienne Blanc acknowledged that there would be operators outside France when he stated that 'community law' prevented them from requiring operators to establish their sites in France. It is proposed to introduce a 7.5% betting tax on sports betting and 2% on poker.
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 and is unable to say whether the legislation has been modified sufficiently to comply with EU law until more detail has been published. At present it has 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'.
Maarten Haijer, Director for Regulatory Affairs said: "The EGBA is opposed to what would be a precedent in Europe: there is no link between a sports betting right and the integrity of sport. Sports betting operators only stand to lose customers and reputation from match fixing. All online bets of EGBA members are monitored real time by the European Sports Security Association (ESSA), and any suspicious betting patterns are immediately forwarded to a wide range of sports federations such as the IOC, ATP, UEFA and FIFA." Maarten Haijer said of the sports betting right: "This makes the sports federations the promoter, the regulator and the judge of their own sport. But isn’t it crucial to separate rather than combine these three functions to avoid any conflict of interest? Restricting the bets that can be taken within a regulatory framework will have a perverse effect. It will simply ensure that those set on corrupting sport will focus on those bets that are not permitted; with no regulatory oversight or early warning system as provided by the betting industry, they will have a free hand".
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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