New tax on gamblers’ winnings in France
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30 Dec 2024 •
Reading time: 3 minutes A recent report by the Conseil des Prélèvements Obligatoires (CPO) proposes an unprecedented reform of the taxation of gamblers’ winnings, with the aim of providing a better framework for gambling practices and stepping up addiction prevention.
A proposal for direct taxation of gamblers’ winnings
Unlike other European countries, gamblers in France are not currently taxed on their gambling winnings. Gambling operators, on the other hand, are subject to various taxes on their turnover. The CPO suggests introducing direct taxation of gamblers’ winnings, a measure unprecedented in the French tax landscape.
The aim of this proposal is to bring France into line with the practices of some of its European neighbours, such as the Netherlands and Spain, where players’ winnings are subject to tax. The aim is twofold: to increase tax revenues and to encourage more responsible gambling.
Reallocating tax revenue to the social security system
The CPO points out that the current exemption of winnings sends out a favourable signal to gambling, which is often exploited in operator advertising. According to a 2017 France Stratégie survey, taxing winnings is relatively acceptable to the general public. The report proposes that winnings net of stakes should be subject to income tax and social security contributions, estimating that this new tax base could generate at least €1 billion a year. However, small winnings would be excluded. Taxes would only apply if the annual net win exceeds a threshold set by law, suggested at €500.
The CPO also recommends simplifying the existing tax system, which currently comprises 33 disparate levies. It recommends a unified tax based on coherent and relevant criteria, taking into account the negative effects and monopolies of operators. Finally, it proposes reallocating the majority of levies to the social security system, compared with only 23% at present, to better address the impact on public health.
The challenges of preventing gambling addiction
Gambling addiction is a growing public health problem in France. Gambling operators are investing heavily in marketing to attract new players, particularly during major sporting events. However, the prevention tools put in place are often deemed ineffective or even circumvented by the operators themselves.
Operators often render addiction prevention tools useless by placing them in inconspicuous locations or making them difficult to access. This situation raises questions about the responsibility of operators and the need for stricter supervision of their practices.
Reactions from the gambling industry
Gambling operators have reacted with varying degrees of enthusiasm to the proposal to tax players’ winnings. Some believe that such a measure could deter gamblers and reduce their income, while others see it as an opportunity to strengthen the sector’s social responsibility.
Associations working to prevent gambling addiction welcome the proposal, seeing it as a way of limiting excessive gambling behaviour. However, they are calling for implementation to be accompanied by support measures for problem gamblers.
Prospects for tax reform of gambling in France
The proposal to tax gamblers’ winnings is part of a wider debate on the taxation of gambling in France. It could be discussed as part of forthcoming tax reforms, with the aim of providing a better framework for gambling practices and stepping up addiction prevention.
However, its implementation would require adapting the levy systems and making players aware of the new tax obligations. The debate is therefore open, and it remains to be seen whether this proposal will be adopted and in what form.