French Media Companies Embracing Online Gambling

In France there has been a frenzy of activity between media groups, football clubs and betting companies since it was announced some 18 months ago that the online gaming sector in the country was to be liberalized.

Betclick, Bwin and Unibet have been aggressive players in the media-partnership market, but Betclick's recent advertising activity, in particular, fell afoul of the government.

Eurosport, a French television channel controlled by the TF1 Group, has also been active and publicized its intention to seek licensure under the new gambling regime next year.

The channel has steadily drawn media attention since launching a United Kingdom-facing betting site, Eurosportbet, in April. Eurosportbet is backed by SPS, a joint venture between Eurosport and the French investment firm Serendipity Investment SAS.

Patrick Le Lay, the former managing director of TF1 and current chief executive of Serendipity, on Thursday offered his view on how the new market will look, and why betting seems to be of such interest to the media.

“The business model for Eurosportbet in France is based on revenues coming from a source akin to a subscription, with families spending on online gaming as much as they do on pay-TV, around 30 to 40 euros per month,” Mr. Le Lay told Le Figaro, a national daily.

He added: “Loto, casinos, and the PMU (French horse racing operator), altogether the gaming market in France comes to over 20 billion euros in turnover, a bigger market than television.”

According to Mr. Le Lay, the idea behind Eurosportbet was for SPS to gain experience in one of the most competitive betting markets in Europe.

He also expressed hope that “French ministers will adopt a level of taxation that is similar to that in place in other European countries.”

When asked why French media groups are so interested in gaming, Mr. Le Lay said:

"The media are not interested in being operators in the market, but as partners to those companies whose business is online gaming. They need to spend a lot of money to make themselves known to the mass market, and for TV and radio companies these investments in advertising will be higher in the long term than the sums spent by the ‘118’ telephone directory providers three years ago."

At the same time as Mr. Le Lay’s comments were being published, Française des Jeux announced it was launching a play-for-fun gaming site. The new site allows the operator to build a client base ahead of the 2010 opening.

IGN's Take

The French operators are aware that overseas companies will have a distinct advantage over them at the time the new regime is ushered in. Foreign operators have been targeting French gamblers for years, and have accumulated many established customers who will provide a sound base for their new business in France. Expect to hear a lot more about betting and gaming in the country over the next six months.