Share of French presidential election votes won by François Hollande in May
More power to PMU? But in order to make the most of this potential revenue stream, the government may look to restore the country’s former gambling monopolies, La Française des Jeux (FdJ) and Pari-Mutuel Urbain (PMU). While legalised online gambling may have been condemned by the Socialists, these monopolies may ?nd themselves the biggest bene?ciaries of Hollande’s regime. When it issued its statement condemning the opening of the market, the Socialist Party also railed against the decision to end La Française des Jeux and PariMutuel Urbain’s monopoly status: “The Socialist Party is opposed to the full liberalisation of online gambling. It is important to have monopolies because there may be con?icts of interest between those who organise betting and those who own media organisations and sports clubs. We propose a reorganisation of the monopolies to provide better support for compulsive gamblers, better distribution of money intended for amateur sports, and to ?ght
Amount needed over five years for France to return to growth, according to Hollande
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France to growth will require an outlay of around €20bn over ?ve years. And, if he is to stay true to his anti-austerity pledges, this money will need to come through taxation, so he too may have to temper his party’s anti-gambling stance “when faced with the power of money". The need for a change in the tax on online gambling operators is abundantly clear. The current rate of tax on sports bets stands at 8.8%, compared to 3.8% in Italy. Coupled with an 85% payback rate, and a lack of casino products to mitigate the risk created by these terms, private operators are not making the returns required, resulting in a 23% decline in amounts wagered sports betting for two consecutive quarters. This, of course sees tax revenues for the sector fall, and runs the risk of driving bettors back to unlicensed, unregulated operators. If Hollande cannot halt this decline, he will ?nd it even harder to raise his €20bn. Unibet’s head of licensed markets, Christophe Dhaisne, supports this theory, saying the need for money will force the Socialist Party to look to ease regulation in order to increase revenues, rather than raise taxes: “If it is hard to anticipate the decisions of the new government in this matter, we do not expect it will take the step to increase the taxes further. A status quo, in the short or medium term, taking into account the other bigger priorities, seems to be a realistic scenario. “In the long term, we have hope the government will take the measure of the current situation and will make the terms and conditions less tough; lowering taxes and switching to a taxation system based on gross gaming revenues and no longer on amount staked for existing products is in everybody’s best interest. After all, better terms and conditions would clearly create a path to pro?tability,” Dhaisne explains.
uncompromisingly against illegal operators,” the party stated in 2010. Despite this support for the former monopolies, Dhaisne does not believe that a return to the previous system is conceivable. “Reversing the French egaming market opening cannot be an option for the government,” he says. “Based on
“REVERSING THE FRENCH EGAMING MARKET OPENING CANNOT BE AN OPTION FOR THE GOVERNMENT”
Christophe Dhaisne, Unibet
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52%
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€20bn
the current situation of the market, we expect the French government to be pragmatic, to confront the hard facts and to direct its efforts to create better terms and conditions for operators and the market to be able to expand.” Such statements are a clear contradiction to the current mood among private operators in the French market, where PMU is thought to have a market share of around 85%, with closest competitor ZEturf said to have a share “not far” from 10%, according to ARJEL president Jean-François Vilotte. This dominance prompted a complaint from Betclic Everest over what it perceived to be PMU’s unfair advantage over its competitors, yet the stateowned horse betting operator could well ?nd its position maintained by Hollande’s government – or even strengthened – should he aim to restore its monopoly status. When contacted, PMU was unwilling to comment. The operator, having seen its online turnover surpass €1bn earlier this year, now seems to be in an unassailable position. In a separate condemnation of egaming legislation, Socialists claimed that by ending FdJ and PMU’s monopoly status, the state has thrown away more than €2bn in tax by cutting the rate to allow private operators into the market. So while a return to the previous system would likely seriously change the sector in its present form, the alternative of sticking with an unpopular tax rate is seen as prohibitive, unpro?table and unworkable. Hollande has already managed to spring some surprises. Despite his policy carving a different path from the Sarkozy-Merkel-endorsed austerity strategy for ending the ?nancial turmoil engul?ng Europe, he has recently appointed Jean-Marc Ayrault, noted for being sympathetic to Merkel, as his prime minister, suggesting that he may well be ?exible when it comes to policies. However, if he follows through with his party’s vehemently anti-egaming stance, the French egaming industry may never have the chance to recover from its current slump.
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