'Sufficient Detail' on France's 'Controlled Opening' Still to Come, Experts Say

The French government has agreed to begin licensing online betting and gaming operators in the fall of 2009 following discussions with Charlie McCreevy, the European internal market and services commissioner. However, the government's proposal is far from complete, experts say.

Eric Woerth, France's budget minister, met with Mr. McCreevy in Brussels on Wednesday, June 4, to discuss France's ongoing case with the European Commission regarding the country's gambling policy.

Following the meeting, Mr. Woerth said the French government had agreed to a "controlled opening" of its online gaming market.

"Being realistic, we're beginning a controlled opening up of online betting, which we have presented to the European Commission," Reuters quoted Mr. Woerth as saying on Friday, June 6.

Currently, two government-run companies hold monopolies over online sports betting and horserace betting in France: La Française des Jeux, the national lottery, and Pari Mutuel Urbain, the horseracing authority, respectively.

Since April 2006, Brussels has argued that French legislation governing sports betting contravenes Article 49 of the European Community Treaty, which guarantees the free movement of services among members of the European Union.

In June 2007, France entered the final stage -- called the reasoned-opinion stage -- of its infringement proceeding with the commission.

At this stage in the proceeding, only two options remain: France and the commission reach a settlement, or the case is taken to the European Court of Justice, Oliver Drewes, a spokesperson for Mr. McCreevy, explained to Interactive Gaming News.

Mr. Drewes, who attended last week's meeting, said the commission is waiting for a detailed proposal before deciding whether to suspend legal proceedings.

"[Mr. McCreevy] expressed great interest for the precise rules he is going to receive, and now we are waiting for that to be submitted to us," Mr. Drewes said. "Once that is finalized, on that basis we will have to see if we believe we can drop the procedure or continue it."

So far, the French government has released few details about its plan to license and regulate online gambling, but Thibault Verbiest, a Paris lawyer who specializes in French gambling law, explained that the conditions of the legislation are still subject to discussion, and probably will remain so, until the draft legislation is presented.

"All we know for sure is that in [the fall] of this year the French government will submit a draft proposal to the Parliament that the Parliament will be required to adopt by June 2009 for creating the first licenses in September 2009," Mr. Verbiest told IGN. "This is the wish expressed by (President Nicolas) Sarkozy. Everything else is speculation, bargaining and debate between the government and the monopoly."

Wes Himes, the managing partner of Policy Action in London, explained to IGN where the French proposal stands currently.

"The controlled opening that they speak of regards online only and does not include lotteries or machines," said Mr. Himes, whose consultancy advises on European gaming and gambling public policy, as well as commercial issues.

He said that, according to a communiqué published on the budget ministry's Web site, horserace betting will be made available through the parimutuel system, exclusively, adding a licensing scheme for online poker and other casino games is likely.

The government is still deliberating on several issues, including whether to employ a fixed odds sports betting system and how to address taxation, he said. Moreover, exactly which companies will be allowed to apply for a license remains to be seen.

"An independent regulatory authority will be responsible for coming up with the licensing regime," said Mr. Himes, adding that conditions for consumer protection, social responsibility and combating money laundering will be attached to the licenses.

Mr. Himes suggested the industry proceed with caution.

"From the industry perspective, I think in principle you can only be encouraged by the French opening," he said. "But at the same time I think we've been waiting a while now for the French to come forward with this and there's still no sufficient detail for the industry to make a determined decision on the content."

Christopher A. Krafcik contributed reporting.