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EGB Preview: France

28 April 2008

By Thibault Verbiest

With regard to opening the French online gaming and betting market, the presidency has not yet decided on the "hows," but the process is now irreversible.

Durieux Report

President Nicolas Sarkozy declared it publicly a few weeks ago: France will open its online gaming market.

Early this month, the report issued by Bruno Durieux on the opening of the French online gaming market was given to Prime Minister François Fillon and to Budget Minister Eric Woerth. Mr. Sarkozy is due to validate it in the near future.

Exclusion of Lotteries and Gaming Machines

The online opening would only cover the online sports betting, casino and poker sectors. Lotteries and gaming machines would apparently be excluded from the scope of the opening.

Operators are Preparing to Enter the Market

Large European and French groups, such as TF1, the French media company, are preparing for the opening of the market. Capital risk funds and investment companies focused on the online gaming industry are being created in France and preparing to move in. Partouche and Barrière, the two main casino operators, have already been granted licenses in Gibraltar and Malta, respectively.

Partnership with EU Members

According to public declarations made to the press by Mr. Woerth, France will work on the legal framework of the reform in partnership with some of its European partners (eg, Finland, Germany, Belgium and the Netherlands). A first meeting is envisaged at the end of April.

Interdepartmental Structure

Moreover, a new interdepartmental structure should be created with the mission of granting licenses to online gambling operators. Authorized online gambling operators will have to meet very strict requirements relating to money laundering and player protection in order to be granted a license.

Scientific Study

A two-year scientific study will be carried out with the purpose of gathering reliable information on these subjects (ie, money laundering and player protection).

Regulated and Controlled Opening

In an interview with Le Parisien, a French daily, Mr. Woerth indicated that -- together with Interior Minister Michele Alliot-Marie and Agriculture Minister Michel Barnier -- he will propose to Mr. Sarkozy and Mr. Fillon to set up a regulated and controlled opening of the online gambling market.

Mr. Woerth has expressed several recommendations in connection with the opening:

Horserace Betting

  • Mutual betting system only, thus excluding fixed odds betting and bookmaking.

  • Players will have to participate in government and equine-industry financing.

  • The horserace betting market should be opened in two successive stages:

      First stage: Private operators should be authorized to distribute horserace betting services. In this case, Pari Mutuel Urbain (PMU) retains exclusive rights to organize horserace betting in France, and private operators should be approved and have a license.

      Second stage: Private operators should be authorized to organize horserace betting. In this case, private operators should be subject to the same requirements and tax treatment as PMU.

    Sports Betting

  • Opening of the sector but with a limitation of the forms of sporting bets. The bet must be related to the performance of the athlete. Other bets unrelated to a sporting event, (eg, a bet relating to the color of the tennis player’s eyes), should be prohibited.

  • The rights of sports organizational bodies will have to be addressed.

    Casino Games

  • Blanket prohibition of online slot machines (insofar as they represent a danger in terms of addiction).

  • Possible opening to poker and other, traditional casino games.

    Taxation

    Concerning taxation, the question remains open. Mr. Woerth has stated the system will have to preserve government and equine-sector financial resources.

    Timetable

    According to Mr. Woerth, the schedule of the opening is in the hands of the president and prime minister.

    Moreover, he believes that France should not rush into the opening of the market, which could be effective in 2009 or at the beginning of 2010. The budget ministry is very concerned about the government's general budget and therefore less inclined to open imminently the market.

    However, Mr. Woerth’s position is not shared by all in the government and especially not by Mr. Sarkozy, who seems more amenable to "speeding up" the process, especially for reasons relating to the financing of sport.

    The question of establishing a transitional period between now and the opening, whereby operators could start offering their services on a contractual basis with the government, is also on the agenda but has not yet been decided upon.

    Operators are certainly eager to be granted temporary licenses as soon as possible and have suggested contributing financially to a sports fund. Sponsorship deals with major football clubs are indeed a major concern for operators such as Bwin.

    It is expected that the weeks to come will offer more clarity on the exact method France intends to use in order to regulate the transitory period.

    EGB Preview: France is republished from iGamingNews.com.
     

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