PokerWorks

The example set by Italy was evidently duly noted by France. When the Italian government made the decision in 2008 to sanction and license online poker for national revenue, and Switzerland was reported to be considering the same, it wasn’t long before France considered updating its own online gaming laws. With the intention of allowing competition in the industry from private companies, the French government has initiated steps to become compliant with European Union agreements.

French gaming law that kept online gaming restricted to a state-run monopoly has been under fire from the European Union for some time. Even the French high court ruled in 2007 that the law prohibited a Malta-based company from offering wagers on French horse races was unreasonable. But it was the European Union that ultimately ruled that governments who count online gaming as a source of federal revenue cannot operate as a monopoly. While France balked for years at the idea of allowing private competitors to enter the French market, it seems that the pressure to do so has mounted, and the French government has decided to update its laws.

On Thursday, March 5, 2009, France announced that legislation has been introduced to end its online gaming monopoly by 2010. The intention to open the market to private competition, all of which will be taxed and generate even more revenue for the French government, will stop European Commission proceedings to force compliance.

According to the Financial Times, French Budget Minister Eric Woerth noted that the industry is worth approximately $9 billion annually, and that it was “no use denying the reality of online gambling and the expectations of French people.”

Official plans are scheduled to be submitted to the cabinet within weeks, and upon approval by Parliament, the law would take effect on January 1, 2010. Contained in the bill are provisions to allow non-French-based companies to take bets from French residents on sports and poker, in which case online poker would be taxed at a rate of 2.5 percent, while horse racing and other sports would be set at a rate of 7.5 percent. Five-year licenses would be issued to companies approved by the government. In addition, provisions will be added to address the problems of children using the services and adult addiction issues.

Some in the industry contend that the taxes to be levied are off-putting and will keep some companies from entering the French market. However, many companies are already preparing documents to apply for operation. The European Union seems to be satisfied with the French legislation and attempts to comply with its rulings, so steps are being taken in the right direction.

As a side note, while European countries debate the breadth and expansion of their online gaming laws and recognize the billions of dollars that the industry has to offer in state revenues, the United States continues to display reluctance to consider the idea. Though there are hopes, courtesy of Rep. Barney Frank, that online gaming could be legalized in 2009, it will not happen without a significant battle in the Houses of Congress. The only hope is that the U.S.’ antiquated views of online gaming will be reversed with progressive legislation.