EUROPEAN COMMISSION REJECTS FIRST DRAFT OF FRENCH
GAMBLING REGULATIONS
12 June 2009
It's back to the drawing board for the
French, with a month to come up with a better proposal
French legal drafters will be back at the drawing board
this week following the rejection of their first
proposals for the liberalisation and regulation of the
French gambling market by the European Commission.
Towards the end of March 2009 the proposals, which
include the regulation of limited online gambling, were
submitted to the French Council of Ministers by Minister
of Budget Eric Woerth. The proposals were referred to
the European Commission in terms of EU Directive 98/34
(see previous InfoPowa reports), starting a 3 month
approval process and aiming for the proposal to go into
effect early in 2010.
Several major French and
international companies have already commenced
positioning manouevres in anticipation of the opening up
of the market.
The proposal includes the
formation of a regulatory body to be titled Autorité de
Régulation des jeux en ligne (Online Games Regulatory
Authority) or ARJEL. The liberalisation of the formally
state-monopolised market will be limited to “online
horse race betting, sport betting and games consisting
of shared games which depend on skill, whereby the
player, after the intervention of chance, demonstrates
his/her will and decides, in relation to the strategy
adopted by the other players, to use a strategy which is
likely to increase his / her chance of winning (for
example online poker)”.
This excludes lotteries,
virtual slot machines, “spread betting”, “betting
exchange”, betting on virtual competition and casino
games in which consumers play against the bank such as
roulette, blackjack etc, on the grounds that these
genres are considered to be too dangerous and likely to
lead to increased addiction.
However, this week
the European Commission responded negatively to the
proposal, saying that it is not compliant with European
law, and the EU compliance body has given the French a
month to come up with a revised version.
It is
understood that the objections are mainly based on the
low maximum payout ratios that operators are permitted
to return to players as winnings, persistent
restrictions on competition from international companies
and difficulties regarding the use of sporting event
brand names. Of these, French claims that setting the
maximum payout ratio low rather than at industry norms
because too high a return encourages addiction are to be
tested.
The Commission has asked the French to
produce evidence substantiating their claims regarding
the influence of high maximum payout ratios on
addiction, pointing out that such a regulation would
discourage operators established in EU member states
from normal business policies or from using efficiency
edges in order to offer higher, and therefore more
competitive, ratios, thus making their offering to
punters more appealing.
The French can perhaps
take some comfort from a more conciliatory reference to
the (for them) troublesome requirement in terms of the
European Treaty requiring that member states allow the
free movement of goods and services with other member
nations; the Commission assured the French that it was
not demanding "....an automatic granting of an
authorisation in France to providers legally operating
in another member state”.
That said, however, it
was noted that any curtailment of the freedom of an
outside provider of gambling services in France had to
be justified by imperatives in the general interest,
such as consumer protection and the prevention of fraud.
The Commission also found fault with the French
requirement that operators must get permission from
rights holders to use event names when offering betting
products, commenting that this would not “constitute a
valid justification for the restrictive policy adopted”.
FFrance now has the choice of making the required
amendments to its proposed law, or facing legal action
by the Commission if it decides to go ahead with the
proposal in its present form. The Commission has set a
deadline of July 8 2009 for re-submission.
Online Casino News Courtesy of
Infopowa
More news here.
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