On the Outside Looking In: French Licensees Only See Red

Published October 21, 2016 by Lee R

On the Outside Looking In: French Licensees Only See Red

In the lush and fertile French market, France-licensed operators are still bleeding badly.

In France, benefits are up, but profits are down. 

Appetizing Figures...

French regulator ARJEL is offering robustly delectable market statistics for 2015, placing the sports betting wager take at €1,440 million ($1,602 million) for a 30 percent increase and gross gaming revenues at €270 million ($300 million) for a 19 percent increase.

Full and Happy

The French government is quite pleased: the ARJEL figures for 2015 regulated online gaming include tax revenues of €382 million, with some €1.946 billion in taxes paid to the French treasury since 2010.

Public Sated

The many avid gamblers and punters in France are also enthusiastic, with the number of active players and spending per player both well up for all three regulated online gambling activities, with sports betting spending per head up almost 39 percent to €226 since 2010, substantially surpassing inflation rates.

Proper Plate?

So, the French government, the French economy, and French players are all enjoying the benefits of regulating online gambling.  Three out of four ain’t bad.

Fly in the Soup

The problem is that the unhappy parties are the ones that provide the service in the first place, and the taxation system is driving them offshore.

Lack of Digestion    

In direct contrast to these mouth-watering numbers, operators in France got caned for a €7 million loss in 2015, a continuation of the bleeding that has seen operators lose a combined total of nearly €222 million since the new laws and taxes were introduced in 2010. 

The Ugly Truth

Only six of the 11 licensed sports betting operators in France have been able to make any profit at all, with one sector about to be choked out completely: only two of nine licensed online poker operators were able to make any profit at all in 2015.

Check Please

So what is the problem with the French system? Well, in sports betting, horse race betting and cash-game poker, gaming taxes are calculated on the total amount bet, not as a percentage of gross gaming revenue, which means that the operating costs of licensed operators are being ignored, leaving licensed operators to pay them all out of pocket, as it were.

Premature Celebration

There are forces within the happily obstinate French government clamouring for change and sustainability. Hopefully they will be heard before the bubble bursts.   

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