FRENCH PARLIAMENTARY DEBATE ON GAMBLING MAKES THE HEADLINES (Update)

9 October 2009

Three million French citizens use offshore betting sites, claims one report
 

The French National Assembly debate taking place this week on the coming liberalisation of the hitherto monopolised gambling market has continued to grab the mainstream press headlines.

Moves to open the market under strictly regulated conditions to privately owned websites offering gambling action on poker, soccer and horse racing were introduced to the Assembly on Wednesday.

Reuters reported that an estimated 3 million French residents illegally use gambling websites based abroad, and quoted French Budget Minister Eric Woerth as saying: "We have chosen a middle way which I think is just and efficient, a controlled opening up of the market.

"I want to put an end to these parallel universes. I want to put an end to the jungle of illegal sites."

Most of the reports recount the monopolised history of the French market, naming the two state gambling monopolies - the PMU for horse racing and Francaise des Jeux for lotteries and other games.

Woerth revealed that the state made over Euros 5 billion a year from gambling on the Internet, at licensed cafes and at the racing tracks.

The French draft law covers licensing and regulation by a body called ARJEL of private firms, which would be allowed to set up websites offering bets on games of skill like poker, sports contests and horse racing with servers on French soil.

Bets on games considered too addictive and lacking an element of skill, such as slots, will not be allowed in terms of the present draft, and the state monopoly FdeJ will retain its exclusive hold over the lottery.

Reuters quotes one unnamed government source who said that the French government could raise about Euro 1.5 billion in taxes per year on legalised Internet betting alone.

French government estimates are that some 100 companies will apply for French licensing, of which probably 50 will be accepted.

H2 Gambling Capital, estimates that this year, offshore operators will earn Euro 346 million in France after paying out prize money, while onshore operators will earn Euro 300 million. Next year, the figures will rise to Euro 671 million for onshore operators and Euro 432 million for offshore ones, the consultancy said.

However, the new taxes planned by the French Government could be prohibitive for newcomers at 7.5 percent on bets on racing and sport and 2 percent for poker.

Woerth has repeatedly warned private foreign gambling companies against pre-empting the liberalisation by starting to advertise in France. This is illegal under the existing sytem but has been risked by a number of clubs and companies anyway. Once the liberalisation is effected, licensed companies will be able to advertise subject to strict guidelines.

French legislators say the draft bill shields gamblers from offshore firms which allow minors to gamble and have no safeguards against addiction. Excluding organised crime, youth gambling and addictive gamblers remain primary objectives of the new law.

The Internet Freedom advocate La Quadrature du Net has protested at provisions in the bill relating to ARJEL's powers to call for the filtering of those online gambling sites defined by the new law as illegal (ie unlicensed).

Although in a first version of the draft law ARJEL was required to refer blocking requests through an independent judge, the text has apparently been changed in order to expedite the process, and gives the authority the direct right to impose filtering of websites on French ISPs.

The procedure calls for ARJEL to address the unauthorised gambling sites, demanding that the managements observe the interdiction and giving them 8 days to respond. In case of non-compliance, the authority may order the immediate banning of the service.

The text says nothing about the filtering methods to be used or the way to make public or update the list of sites to be blocked, and no reference is made to the costs incurred by blocking the sites.

Deputy Lionel Tardy has submitted an amendment to the text requiring that the government be more specific regarding filtering procedures and the attendant costs, and seeking to reintroduce the originally envisaged legal procedure involving an independent judge.

La Quadrature du Net warns that filtering sites is entirely inefficient and also a dangerous measure as it may become a precedent for what amounts to Internet censorship being extended to other types of website in the future. This could open the door to limitations of the freedom of expression, and there is also the risk of blocking sites other than the targeted ones which may happen when access to a site is blocked based on IP addresses.

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