France weighs egaming tax changes, pre-pay cards

TAX ON fixed odds betting in France when the online industry becomes legal this summer could be as much as half a percentage point higher than expected, if proposed amendments to draft gaming laws are approved by French politicians this month, while tax on horse racing could fall by the same proportion.

The levels of taxation for fixed odds sports betting for French-licensed operators will rise from 5.7% to 6.2% under the proposed changes, with horse racing tax dropping from 5.7% to 5.2% on players’ stakes.

The amendments, which also include dropping a ban on egaming operators accepting pre-paid cards, will be debated in the French Senate on 23 and 24 February.

The tax rates proposed currently stand at 8.5% of player stakes for both fixed odds sports and horse racing bets, consisting of 7.5% of ordinary tax plus a further 1% ear-marked for sports funding. Yet while the new proposal would see them reduced, operators have always maintained that a tax on player stakes, rather than on gross gaming revenues, would prevent them from building viable businesses in France.

The changes are proposed by the president of France’s Social Affairs Commission, Nicolas About, and its vice-president of the Commission for Culture, Education and Communication, Ambroise Dupont.

The higher rate of taxation for fixed odds sports bets is intended to ensure that funding for the French horse racing industry does not drop, Dupont has said, and that the pay-out ratio for pool betting punters can compete with the pay-out for fixed odds sports betting.

A further 0.3% tax on punters’ stakes, capped at €4m, will also be levied on operators, with revenue raised directed towards funding the French Anti-Doping Agency.

Dupont told EGRmagazine.com‘s French media partner, iGaming France, that even if the whole of the law had not been passed by the time of the football World Cup, there would be a grace period allowing operators to offer bets in France from that period.

Dupont said: “There will be a transition period to allow operators to offer bets in France in time for the football World Cup if the legislation is not ready in its entirety by June. The aim of such a measure is to ensure punters don’t bet on illegal sites as is the case at the moment, and that licensed operators can start working in the best possible regulatory framework.”

Changes to rates for fixed-odds betting will affect operators including the monopolies. Francaise Des Jeux appointed software company LVS to deliver a fixed-odds product this month that will see it compete against pools betting monopoly Pari Mutuel Urbain, which revealed it will offer fixed odds betting in May last year and signed a deal with Paddy Power’s Airton Risk Management arm to provide PMU with fixed-odds risk support in December.

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