Online casinos : ban to be lifted soon in France
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23 Oct 2024 •
Reading time: 3 minutes France is about to take a decisive step. The government has announced its intention to authorize online casinos, a practice that has been prohibited until now on French territory, as well as in Cyprus. This decision, which is part of the 2025 Finance Bill, aims to regulate a flourishing but illegal market, while generating substantial tax revenues.
In France, online gambling is authorized under a very strict framework. Indeed, slot machines, blackjack, roulette and other online casino games are prohibited. The only authorized online games are lottery games, sports betting and poker. However, according to the National Gaming Authority (ANJ), more than three million French people would have played illegally in 2023 on sites operating from abroad. A situation that the French government now wants to turn to its advantage.
Lucrative black market and need for regulation
Despite the ban, online casinos have experienced considerable growth in France. Millions of players connect to foreign platforms every day, generating billions of euros in turnover. This situation is spiraling out of control, depriving the State of significant tax revenues and exposing players to increased risks.
Faced with this observation, the French government has decided to act. The authorization of online casinos is presented as a necessity to combat the black market, protect players and generate new revenues. The ANJ estimates that the gross gaming revenue from illegal sites amounts to several billion euros each year.
Financial issues
The government amendment plans to subject online casinos to high taxation. The gross gaming revenue (GGR) will thus be taxed at a rate of 27.8% as corporate tax and 27.8% as social security contributions, for a total rate of 55.6%. This high rate is comparable to that applied to other online lottery games.
This tax could bring in several hundred million euros in additional revenue to the budget each year. According to a study by the ANJ, the gross proceeds of games from illegal sites would be between 748 million and 1.5 billion euros, or between 5% and 11% of the overall gambling market. This revenue could be used to finance public policies or reduce the deficit.
Divided reactions from the industry
The government’s decision has sparked mixed reactions. Online gaming operators are pleased with this opening, which will allow them to expand their offering and benefit from a more stable regulatory framework.
On the other hand, physical casinos are strongly opposed to this reform. They fear a significant drop in their turnover and the closure of establishments. Gregory Rabuel, president of the Casinos de France union and CEO of the Groupe Barrière, estimates that 30% of casinos, or 65 of the 202 casinos in France, could be forced to close their doors.
“It is a thoughtless choice, without any consultation, brutal and hasty”
Gregory Rabuel
According to him, the opening of the online casino market would mean an annual loss of 450 million euros for the State and the municipalities that host casinos, due to the drop in turnover of these establishments. He also draws attention to the risk of job losses. If these casinos close, 15,000 jobs would be lost.
La Française des Jeux (FDJ), which recently acquired the Swedish giant Kindred, is more reserved. While it recognizes the financial stakes, it is concerned about the increased risks of addiction linked to online casino games. The ANJ shares these concerns and stresses the need for strict regulation to protect the most vulnerable players.
And the players?
The authorization of online casinos raises many questions. Players will benefit from a wider range of games and easier access to games. However, the risks of addiction are likely to increase, requiring increased monitoring by the authorities.
The decision to authorize online casinos in France marks a turning point for the gambling sector. While this reform is likely to generate significant revenue for the State and strengthen the fight against the black market, it also raises many questions in terms of player protection, competition and employment. It will be essential to put in place a solid regulatory framework to ensure the sustainable and responsible development of this new market.