Published on 11/02/2024 05:47:13
France has announced plans to change its laws regarding online gambling. It will begin discussing the legalization of online casinos for its 2025 budget. In this text, we discuss the implications.
France has finally begun to open its doors to the possibility of legalized online casino gaming in the country. The news stems from an amendment filed by the government this week. This will bring the country into line with most other European states. Currently, Cyprus is the only other member state that does not allow online casinos. The amendment was added to the 2025 budget and will be debated in parliament this week.
Online betting is currently allowed in France, though casinos are not. However, there is an exception for poker, which is deemed a game of skill as opposed to luck. Therefore, online poker rooms that exist in the country will be at a distinct advantage as they switch over to casinos. There is also a state lottery run by La Française des Jeux (FDJ) who also provide scratch cards.
However, for any casino operators booking flights to Charles De Gaulle Airport as they read this article, this change will come at a cost. The government has also said it plans to drop a 55.6 percent tax on the sector.
One of the biggest outcries has been from the brick-and-mortar sector. These casinos believe the changes will reduce footfall into their operations. Some predict it will diminish their revenue by as much as 30%. Around 15,000 jobs could also be at risk. This will be costly at a time when France needs them the most. In the second quarter of 2024, the level of unemployment was 7.3%. This is known to have a direct impact on GDP and is something the French government will not want to make worse.
It is unclear if this argument bears any weight. Since the introduction of online casinos, they have grown in popularity enormously. Their appeal is that they allow people to play games from the convenience of their homes. You no longer need to get up and go to a casino to play a slot machine or roulette wheel. It can be done from your device. Combined with improvements in customer service and the provision of fast payout casino facilities in a range of payment methods, the industry has increased its appeal to a wide number of demographics.
As these services let people try out games and strategies, many in the industry claim it has increased footfall in physical casinos. People no longer have to be afraid of making silly mistakes or learning games in the casino. They can do it from home and go there after. In places like Las Vegas, MGM Resorts has noted a 4% increase in the last quarter alone, and the city's skyrocketing land prices show the strip is as busy as ever.
Yet in other places, the story is different. New Jersey is one state in the US that has some of the most relaxed attitudes and laws towards gambling. It has a long history with casinos and is one of only seven states that allow them to operate. While it has posted record profits, physical casinos are down 6.5% on the year before. September 2024 was also 21.6% down on the previous month.
Banning online casinos also results in a black market. The government believes this generates 1.5 billion euros a year, roughly 10% of the sector's income. By not addressing this issue, they risk following a similar path found in South Korea. With a total ban on gambling, even for citizens who travel abroad, South Korea now has a major problem with unregulated, black-market casinos. This has also been the case in Turkey, where gambling is also strictly regulated. On the Turkish side of Cyprus, in particular, casinos have become dangerously unregulated with motorcycle couriers handling transactions.
There is also another side to this, alongside the desire to help those with gambling problems and regulate casinos. It is that this is going to provide a lot of money to France when it really needs it.
The public deficit of the country hit 5.5% of its GDP last year. A public deficit is when a government spends more money than it receives in a yearly period. EU member states must have this at no more than 3%, showing France's economic predicament. While the government has pledged to limit spending, it is also trying to bring in revenue from new sectors and industries. Its tax revenue has been linked to exports at the expense of domestic consumption. This has resulted in lower VAT amounts, which is also something it will hope to rectify.
The true impact of this will not be felt for years. It will undoubtedly bring in high amounts of revenue for the country. With the right frameworks in place, the sector could also be made to regulate itself with responsible gambling initiatives that have been used in the UK and the US. However, the heavy taxation may be choking its growth before it even gets off the ground. To really see the benefit, France may need to lift restrictions even further.
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