French online gaming sector faces backlash form land based casinos

Sudhanshu Ranjan October 25, 2024

SiGMA news

The French government’s recent introduction of an amendment to regulate its online casino sector could reshape the gambling industry. As the last major western European market without a regulated iCasino system, this development is significant. However, the proposal has sparked strong reactions, especially from the country’s land-based casinos, which believe it threatens their survival.

Proposed amendment

The amendment sets out a comprehensive regulatory framework, including a levy on online casinos’ Gross Gaming Revenue (GGR) at 27.8 percent. Coupled with increased taxes on all gambling verticals, the total tax burden for regulated online casinos could reach 55.6 percent, aligning with tax levels applied to lottery products. The amendment is designed to foster competition by opening the market to all operators meeting compliance and licensing requirements. France’s motivation for regulating the online casino sector is driven by economic realities. With public debt at 112 percent of its Gross Domestic Product (GDP) and a deficit of 5.5 percent of GDP, the government is exploring avenues to raise revenue. If passed, the amendment could contribute significantly to tax revenues, with potential earnings of up to $1 billion.

The proposed regulation presents a game-changing opportunity for established online operators like Betclic, Winamax, and Française des Jeux. These brands, along with international players like Unibet and Maria Casino, have long called for an open market, and the amendment could pave the way for new business ventures.

Reaction of land-based casinos

Despite the optimistic outlook for online operators, land-based casinos are pushing back. Grégory Rabuel, President of Casinos de France (CdF), expressed grave concerns, describing the amendment as a totally ill-considered decision. Rabuel warned that the move could lead to a 20-30 percent drop in GGR for physical casinos, threatening up to 15,000 jobs and leading to the closure of 30 percent of establishments. Rabuel stated, “Opening up online casinos to competition will lead to a 20-30 percent drop in GGR for land-based casinos and the closure of 30 percent of establishments. This will have catastrophic consequences, particularly in social terms: it is estimated that 15,000 jobs will be lost. More generally, this is tantamount to signing the death warrant for land-based casinos.”

The amendment also addresses the growing issue of illegal gambling. Unregulated online casinos have flourished in recent years, with estimated revenues ranging from $748 million to $1.5 billion. By regulating the sector, the government aims to curb illegal operations and secure significant tax revenues.

The Autorité Nationale des Jeux (ANJ) has played a pivotal role in combating illegal operators. Through rigorous investigations and international collaborations, ANJ is striving to clean up the sector and create a safer gambling environment for French players. For major online brands, the amendment could be a long-awaited victory. Operators like Betclic and Winamax have the potential to expand their offerings in a more secure and competitive environment, paving the way for growth and innovation in France’s gambling market.

The amendment is set to be debated as part of the 2025 budget. While supporters are optimistic, opposition from land-based casinos and community leaders could pose challenges.