FDJ privatisation to dominate gambling proceedings in France

first_imgAddThis Sharing ButtonsShare to LinkedInLinkedInShare to FacebookFacebookShare to TwitterTwitter Email Address 2nd January 2019 | By contenteditor The French igaming sector has finally found an equilibrium of sorts after eight years of regulation. While the sports betting vertical has justifiably taken much of the plaudits for its strong growth over that period, measures implemented by the regulator and relevant stakeholders have also had beneficial effects on online poker and pari-mutuel horse racing, the other two regulated verticals in France.French regulator L’Autorité de régulation des jeux en ligne’s (ARJEL) most recent figures for the third quarter confirmed these trends. Online sports betting continued to grow, with gross revenue up 40% to €149m during the period. Pari-mutuel horse racing revenue was up 6% to €63m, while long-term trends for online poker were reversed with a 3% rise in to €59m, with cash games stakes up 13% to €1bn and tournament entry fees up by 7% to €528m. The vertical benefitted from the pooling of liquidity with Spain and Portugal, which launched early in 2018.           But as with any evolving market, there are a number of underlying trends and issues the industry wants to see resolved so it can develop on a more secure footing.For France, these are the privatisation of the state lottery monopoly Française des Jeux (FDJ), which in turn prompts further debate around the state’s role as a stakeholder in FDJ. The privatisation could have further-reaching effects on the industry, leading to an expanded remit for iGaming regulator ARJEL, and could see a case made for a reform of the current online gaming tax rate, as well as regulation of the online casino vertical.The FDJ privatisation is the dominant gambling theme in France currently, and this is likely to continue for the foreseeable future. It will also determine the environment in which the online operators will work because the three other themes mentioned above in some capacity will flow from the project.   FDJ’s privatisation has been in the offing for some time and has had a number of false starts, but is likely to go ahead this time as the government puts in place the legislative tools to make it happen.The country’s National Assembly adopted the privatisation bill during a first reading in October, with the authorities confirming that the state would maintain a 20-25% stake in the privatised entity. This engagement on the part of the French state in a newly-privatised FDJ, whether it happens via a float on the stock exchange or opening it up to investment groups, raises a number of issues for French online gaming operators such as ZETurf, NetBet and Betclic Everest Group.Emmanuel de Rohan Chabot, founder of ZETurf and chief executive of French igaming trade body the Association Française du Jeu en Ligne (AFJEL), told iGaming Business: “The project raises a number of key issues for our members. Among them are the fact that the state will be a gambling stakeholder in a majority private gambling operator. It also acts as a regulator and collects the taxes that we generate.“There are a number of conflicting interests that worry us with regard to its mode of operation and how it could decide on regulatory matters.”Also in October, France’s National Audit Office (Cour de comptes) and MPs recommended that regulation of the entire gambling sector be brought under the control of one regulator; the idea being that igaming regulator ARJEL’s remit would be expanded.The government has agreed to a new regulator, but rejected relinquishing the Home Office’s oversight of land-based casinos, citing the risks of money laundering linked with the sector. FDJ, meanwhile, is not enthused by the prospect of no longer being regulated by the Treasury, fearing it would dilute its influence over any regulatory changes. Which is why for AFJEL and its members, it is imperative that regulation be brought under one authority.The other key AFJEL demand is that regulation applies equally to them as it does to FDJ; in particular games that are branded as lottery should be renamed as scratchcard or instant win products, which many believe is a more accurate description of the games.As for the long hoped-for taxation change to a gross profits-based system and potential regulation of the online casino vertical, these are not going to happen in 2019, ARJEL president Charles Coppolani told iGaming Business.   This is mainly because of the ongoing FDJ privatisation project, but also because after eight years of regulated activity operators have adapted to their working environment, although their key demands remain.And with societal upheavals such as the recent protests by the so-called gilets jaunes, the French government has other priorities that it needs to address urgently.All these topics will be debated when France’s parliament resumes in 2019. Meanwhile private operators, regulators and politicians will continue to try to steer a course that enables the sector to grow, while keeping the country’s historic stakeholders happy and maintaining a level of tax revenues that the state is satisfied with.          But for all the regular complaints to come out of France with regard to how its igaming sector is treated by the authorities, the reality is that it remains a market with substantial growth potential.All these factors will be analysed in further depth in the forthcoming iGB France e-zine due to be published in February. Subscribe to the iGaming newsletter French market growth and calls for tax rate changes will be overshadowed by speculation over FDJ privatisation in 2019, writes Jake Pollard FDJ privatisation to dominate gambling proceedings in France Legal & compliance Topics: Legal & compliancelast_img

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