FCA flags up concerns about former monopolies
The French Competition Authority is worried about potential distortion between former monopolies and new entrants into regulated markets.
The French Competition Authority (FCA) has published an opinion today within which it flags up concerns about potential advantages afforded to former monopolies since the opening of the French regulated market.
The non-binding opinion comes in response to issues raised by the European Gaming & Betting Association (EGBA) last year, and the FCA has concluded that measures must be taken “to avoid any competitive distortion between the former monopolies and the new entrants.”
It took note of the fact that Pari-Mutuel Urbain (PMU) and La Francaise des Jeux (FDJ) still reap the benefits of their former monopoly status on the land-based side of operations, but suggested a separation of these operators’ physical sales points and their online betting provisions.
Since the French online betting market was opened to competition in May 2010, ARJEL have issued licenses allowing 19 operators (including the former monpolies) to provide sports betting, betting on horse racing, or both. However FDJ and PMU still retain a strong presence in the world of retail sports betting, where they were the monopoly operators for sports betting and horse racing respectively.
And the competition authority is also concerned that both former monopolies have gained unfair advantages by using their pre-regulation customer bases to increase their online base in the regulated era.
It said: “The availability of PMU and FDJ’s offline points of sale, under preferential conditions, to develop their online activities that are subject to competition could lead to a distortion at the expense of alternative operators that don’t have such opportunity”
“Legal and operational separation of activities carried out in the form of a monopoly (offline) and those areas subject to competition (online)”¦constitute one of the remedies usually advocated by antitrust authorities in order to avoid abusive cross subsidization. Accounting separation as imposed by article 25 of the law of 12 May 2010 does not entirely respond to the need to prevent this risk,” it added.
Some questions had also been raised about whether expensive betting licenses would prevent certain new operators from entering the market, thus giving an unfair advantage to those former monopolies already in place.
Indeed it has been suggested that online gaming regulator ARJEL should set guidelines to fix the terms of agreements between operators and organisers of sporting events, in an attempt to prevent the fluidity of fees dissuading new operators from entering the market.
Despite all this, however, the competition authority was willing to admit that “Real competition seems to be emerging between sports betting operators and online.”
While not binding, the agreement is expected to help any operators who wish to challenge the existing legal framework, and ARJEL are certainly expected to take note of it in any considerations of whether the status quo should remain.
BetClic Everest, one of the operators licensed by ARJEL for sports betting and betting on horse racing, has already welcomed the decision and called for the introduction of legislation to improve competition within the French market.