With the imminent enactment of a new law inspired partly by the success of other European countries, the online gambling scene is about to change in France. While the European Commission is closely monitoring the liberalization of the market, which was previously controlled by Francaise des Jeux, the French Government, the European Commission is also preparing for the fast-paced online gambling environment in which operators offer a growing number of games to French consumers. This is a massive opportunity for online gambling operators.
This article will cover the main points of the French Gaming Law, which is still in finalization. It will also examine its viability regarding tax and licensing and how it will impact foreign entrants to this market.
This legislation is essential to protect the consumer’s interests by limiting the number of wagers and winnings that punters can place. Operators will have to warn about the dangers of excessive gambling and underage play.
The market will open to horse racing, sports betting, and shared games. These games allow players to increase their chances of winning by using a strategy relative to their opponents. Online lotteries, online slots machines, betting exchanges, and casino games that involve playing the bank (blackjack or roulette, for example) will not be allowed to open.
ARJEL (Games Regulations Authority), a new public authority independent of the Government, will regulate remote gambling markets.
- Ensuring compliance to policy objectives about internet accessibility
- Providing specific government requirements for the different types of available licenses.
- Preparing and attributing license requests for online gambling operators
- Monitor online operations and a crackdown on illegal gambling sites.
ARJEL will have the power to prevent access to these websites via a direct injunction to Internet Service Providers and block financial transactions.
- Implementing auditing regulations relating to technical and financial data in each transaction.
- Making suggestions for the Government regarding legislative and regulatory issues.
- All operators will be required to provide information about their identity, gambling experience, shareholding, and any measures taken to prevent fraud or money laundering, secure online payments, protection of data and minors.
- Operators in the EU and ECC will be granted licenses. All of these operators whose shareholders or headquarters are located in non-cooperative tax havens will be denied rights to offer services in France.
- Access to online gambling websites must be made possible by a domain name of the first level ending in “.fr.”
- A mirror server located in France will contain all gambling activities and trades between operators and players.
- The licenses are reasonable for five years and may not be transferred.
Based on the following:
- 8.5% – Sport betting
- 15.5% – Horse racing betting
- Online poker – 2%
France’s attractiveness should not be diminished by the proposed tax regime, making it difficult for foreign online gambling operators to access the French market. For example, a tax solely on gross gaming revenues is less appropriate for poker operators. A 2% tax on wages would mean that approximately 60% of gross income would be taxed. Operators could be discouraged from entering the market, and it would also violate EU regulations on the freedom to provide services.
Senior government officials have confirmed that France will not begin granting online betting licenses in 2010 as initially thought. The ARJEL will require a few more months before implementing the Draft French Gaming Law and starting granting rights. The Draft French Gaming Law, partly due to the detailed opinion rendered by the Commission on June 8, 2009, will not be implemented starting January 1, 2010. It should be in place by the time the World Football Cup kicks off in South Africa, in any case.
This is an opportunity to congratulate Barney Frank, United States House Representative for Massachusetts. Frank has taken an active role in fighting for the legalization of online gambling. Online gambling is crucial given the current state of the economy. According to the “Safe and Secure Internet Gambling Initiative,” this would create 32,000 new jobs and generate $57 billion in tax revenue over five years. We, as a nation, have no choice but to legalize online gambling. With unemployment at a high of ten percent and local governments trying to balance their budgets, It is deeply disappointing to see our once-powerful nation in such a sorry state. Despite President Obama’s claims, the economy is in a state of chaos, and more jobs are being lost than those created.
Many people will be against this. They cite safety and fraud concerns. However, some safeguards can be implemented to minimize these risks. One of those safety controls is personal information verification derived from one’s credit history. This will ensure that no child under 18 can gamble. Compulsive gambling protections include tracking unusual activity and toll-free numbers that can be called to receive help with problem gambling. It is essential to complete sure that financial transactions are secure. An escrow system could allow payments to Internet gambling operators to be held, allowing consumers to challenge unauthorized transactions. We hope President Obama will take the initiative to make this a reality and bring us back to the top of the world.
Online gambling banned
The U.S. Congress approved Monday, October 2, a bill banning internet gambling. After President Bush’s signature, the account will be made a law. It will be illegal for online credit cards and banks to transfer money to online gambling companies if it becomes law. Online gaming companies’ shares are experiencing a massive drop, with many of them seeing their shares fall to as low as 50%.PartyGaming and 888 Plc were the major losers.
What’s the future for online gambling?
Although this is not an easy forecast, it does seem that it could signal the end to the flourishing online gambling industry. These online gambling companies make a significant revenue solely from U.S. players. Online gambling sites could lose a lot of their income if outlawed in the United States.
Online gambling sites won’t just sit back and watch as millions of dollars are at stake. We have to wait and witness what happens.