France open up Online Gambling

France will open up online gambling to private competition from next year, the government said on Thursday, bowing to European Commission pressure to end the monopolies enjoyed by state operators but not going far enough to satisfy the industry. Unveiling long-awaited plans for an online gambling bill that will be submitted to the cabinet at the end of the month, Eric Woerth, budget minister, said it was “no use denying the reality of online gambling and the expectations of French people”. Online operators, including non-France-based companies, will be granted five-year licences to take bets from French residents on sport and poker. Lotteries and slot machines will remain under state control. Operators will be required to provide measures that prevent children from gambling online and control addiction. The illegal online industry is worth around €7bn ($9bn) and comprises 25,000 sites, said Mr Woerth. The bill would end the monopolies enjoyed by Pari Mutuel Urbain, the state horse race betting operator, and Francaises des Jeux, which runs lottery games and sport betting for the government. Both have seen their online betting services drive up revenues sharply. Pari Mutuel’s bets on horse-racing – which pays out winnings based on a pool of all bets received for a race – will continue, a move aimed at protecting France’s horse-racing industry, but operators will be able to offer fixed-odds bets on other sport. Industry leaders however predicted the caveats in the bill would put off many operators. Mr Woerth said he was proposing to impose a 7.5 per cent tax on operators taking sport bets to maintain the €5bn a year it gets in receipts from the industry. He also intends to set limits on the ratio of bets that can be paid out to players in winnings. “These raise questions about how economically viable the whole project will be [for operators],” said Sigrid Ligne of the European Gaming and Betting Association. France has taken a hard line against online gambling practitioners, having the foreign-born chief executives of gaming companies arrested for breaches of betting laws. But France is among a number of countries which have come under fire from the EC for failing to liberalise their gambling markets. French-based companies have begun lining up in preparation for the liberalisation of the market. Among those expected to apply for licences are land-based casino operators Lucien Barriere and Partouche, and French-based TV channel Eurosport. Stephane Courbit, founder of French channel TF1, launched Mangas Capital Gaming, an investment fund for online gambling opportunities, and last year brought up British operator Betclick. Mangas is now half-owned by Société des Bains de Mer, the Monaco-based hotel and casino group. Copyright by: Financial Times