EGBA SOUNDS A CAUTIONARY NOTE ON FRENCH GAMBLING LIBERALISATION

27 March 2009

Concerns on the possible creation of a French internal online gambling market enforced through financial and ISP blocks

 

The European Gaming and Betting Association has published some penetrating and perhaps prescient questions regarding the liberalisation of the French gambling market currently underway.

In compliance with the European Union's Directive 98/34/EC the French submitted the first draft of their law to Commissioner Verheugen’s services on March 5th in the context of a preliminary conformity test with EU Law. The draft law, also revealed to the media on the 5th March, was presented today (Wednesday) to the Council of Ministers.

Member States and the European Commission have until the 8 June to examine whether the law is in conformity with the rules of the EC Treaty and to require, if necessary, amendments to be made so as to avoid future litigation.

However, EGBA warns that the online gambling and betting provisions in the French draft may have compatibility issues with EC law, and that true and equitable liberalisation cannot be taken for granted.

The Association said in a statement today that it is concerned that a series of key provisions of the draft law envisaged by the French government would conflict with the EC Treaty and European Court of Justice (ECJ) case law, and asked the following specific questions:

* How can the reform and the opening of online sports betting only be consistent when sports betting in the offline environment will remain under the monopoly of FDJ and PMU?

* Is “French tradition” an acceptable justification to limit the opening of horse betting only to pool betting – especially when fixed odds betting is offered for all other types of sports and is very much appreciated by French and European consumers?

* Is a ceiling on the pay-back ratio (percentage of stakes paid back to players) to the same level of those currently applied by historical operators compatible with EU law? Given that such ceiling has no proved or known impact on consumer protection, what other objectives than protection of the French market and the position of historical operators can it possibly serve?

* Will the French online gaming authority, in compliance with the jurisprudence of the ECJ, take into account the warranties and controls already offered by other EU licensing jurisdictions such as for instance UK, Malta or Gibraltar, in order to avoid the application of dual licensing and purely administrative restrictions in the single market?

* Is the creation of a "sports betting right" granted to the French sport federations in the context of commercial agreements with sports betting operators in France a credible means to prevent match fixing? The majority of stakeholders have already developed partnerships and successful early warning systems to anticipate and prevent those risks.

"These five points are for now the most crucial points of the reform from an EU perspective," said Sigrid Ligne, secretary general of EGBA. "Other important elements will, indeed, still be clarified in the coming months through various decrees which will also require notification to the European Commission before they can be adopted at national level.

"EGBA is particularly concerned about the threat of the creation of a local internet market for online betting and gaming services given the French authorities’ clear intention to adopt payment and ISP blockings and the continued criminal enforcement against EU established online gaming and betting operators. This would be completely incompatible with the European dimension and the cross-border nature of this leading internet sector.

“The notification procedure is a great tool to anticipate potential conflicts. We are convinced that the recommendations that will be addressed to France by June will facilitate the French Parliament’s discussions and prevent unnecessary litigation once the law comes into force,” Ligne concluded.         

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