The French government is moving toward legalizing online casino games in a bold move aimed at bolstering its state finances and curbing illegal gambling. The proposed amendment, part of the 2025 draft budget, suggests introducing a 55.6% tax on online casino turnover, potentially generating significant revenue for the country.
Addressing France’s Budget Deficit
France’s growing deficit has become a major concern for the government. In 2023, the deficit reached 5.5% of GDP, well above the EU’s target of 3%. The situation could worsen, with 2024 figures expected to exceed 6%. Finance Minister Antoine Armand emphasized that legalizing online casinos could help combat the deficit by contributing valuable tax revenue to the national budget. “Those that exist, which are sometimes operating illegally, must either be closed or regulated or have to contribute,” Armand said in a recent television interview .
The country’s current legal gambling sector generated approximately €13 billion in 2022, according to a PricewaterhouseCoopers report. However, an estimated €748 million to €1.5 billion of gross gaming revenue comes from illegal online casino sites, which the government is hoping to bring under control through regulation .
Fighting Illegal Gambling and Public Health Risks
Legalizing online casinos would not only bring in much-needed revenue but also address the growing problem of illegal gambling. France’s gaming watchdog, l’Autorité nationale des jeux (ANJ), has highlighted the risks posed by unregulated sites, which often operate from tax havens. These illegal platforms expose French citizens to gambling without proper consumer protections, exacerbating addiction risks.
By legalizing and regulating online casino games, the government aims to create a safer gambling environment. Proponents of the law argue that regulation would provide tools to mitigate the public health impacts of problem gambling. This includes measures to protect vulnerable players, which would be implemented in coordination with ANJ and other relevant authorities.
Concerns from Land-Based Casinos
Despite the government’s optimism, the proposal has drawn criticism from the country’s physical casinos. Grégory Rabuel, president of the Casinos de France union, expressed concern about the impact on traditional establishments, warning that legalizing online casinos could result in a 20-30% decline in revenue for land-based casinos. Rabuel also predicted that around 30% of these venues could close, leading to the loss of approximately 15,000 jobs.
In a statement to Les Echos, Rabuel stressed that if online casinos are legalized, they should only operate in partnership with physical casinos to ensure that local businesses and jobs are protected. He called for a cautious approach to prevent weakening France’s existing network of more than 200 land-based casinos .
Moving in Line with EU Neighbors
France and Cyprus remain the only EU member states where online casinos are entirely banned. The French government has pointed out that the new amendment is designed to align France’s regulations with those of its European neighbors. This would bring the country closer to the broader EU trend of regulated online gambling .
Prime Minister Michel Barnier’s administration, which has been keen to address the fiscal challenges facing France, sees the legalization of online casinos as part of a broader strategy to modernize the gaming framework. The move would place France in a stronger position compared to other EU markets, enhancing both its revenue collection and regulatory oversight.
Balancing Revenue and Risk
While there are strong arguments for the potential financial benefits of legalizing online casinos, industry experts warn that this change alone may not entirely eliminate illegal gambling. Elsa Trochet-Macé, a spokesperson for ANJ, pointed out that even with regulation, illegal operators might continue to appeal to a portion of the gambling market, particularly those drawn to riskier or less regulated options. As a result, a careful balance must be struck between generating revenue and ensuring the effectiveness of regulatory efforts.
If passed, the amendment is expected to take effect in 2025, with the hope that it will provide France with a fresh source of tax income while mitigating the risks of unregulated online gambling. Advocates of the measure are confident that it will help address France’s fiscal woes while simultaneously creating a safer environment for online gambling enthusiasts.
Source:
“Legalising Online Casinos: France Places a Bet on Solving Budget Woes“, euronews.com, October 23, 2024.