French Bill to Legalize Online Poker Passes Assembly- Next to Senate

On October 13, The French National Assembly approved (302-206) the bill to liberalize and regulate online gaming (including online poker) in France. The bill now passes on to the Senate for further debate.

The bill would end the domination of online gambling by France's two state monopolies: Pari-Mutuel Urbain (PMU) for horse racing, and Francais des Jeux for lotteries and other games, and allow privately owned websites to offer online poker, and betting on sports and horse racing.

Under the proposed law, state-owned Francaise des Jeux would still retain its monopoly over Lotto. Also. bets on games considered too addictive and lacking in an element of skill, like one-armed bandits, would not be allowed.

Eric Woerth, the budget minister who was the architect of the bill, has said the state made over 5 billion euros (4.6 billion pounds) per year from gambling on the internet, at licensed cafes and at the racing tracks.

For years, France has been under pressure from the European Union and from private gaming firms and European gaming associations to open up their market worth billions of euros to competition.

OBJECTIONS to PROPOSED LAW RAISED

Several amendments added to the bill have come under criticism.

One amendment stipulates that any company wishing to apply for a license must close their current French player accounts for six months before they can be licensed. Companies object saying it effectively allows current French monopolies to further solidify their player retention.

Another objectionable amendment effectively says that only online gambling operators without subsidiaries or operations in tax havens (such as Gibraltar) would be considered for a license, which adversely affects a great number of online poker and gambling sites.

Companies such as PartyPoker.com and bwin and the European Gaming and Betting Association (EGBA), which counts the two companies as members, have strongly criticized these restrictions. Some industry observers have gone so far to say that the restrictions are thinly veiled means for the current French duopoly to retain their monopoly position in the market.

EGBA OBJECTIONS

The European Gaming and Betting Association (EGBA), whose members include bwin, Expekt, PartyPoker parent Party Gaming Plc, and Unibet has again expressed it concerns with the proposed law. In addition to the above concerns, another concern is the requirement for EU operators to establish an IT platform in France in order to provide data which could, in full transparency, be provided cross-border from their existing IT platforms. Such obligation would lead to duplications and create a clear operational and financial disadvantage for non-French operators.

Seven months after its notification to the European Commission, EGBA continues to assert that the French proposal still conflicts with the EC Treaty.

RGA OBJECTIONS

While voting in the French Assembly got underway, the Remote Gambling Association expressed its regret that the French Gambling Bill in its current form will fail to achieve any of its stated objectives.

The RGA said the proposed regulatory and taxation regime "will be wholly unattractive and in most cases completely unviable" for private sector online gambling companies, while cautioning that even further restrictions may be introduced into the bill as it progresses towards enactment.

"In its current form, the planned French legislation will simply not be viable for the vast majority of private sector operators and France will miss out on the opportunity to share in the growth and associated benefits of having its own thriving, regulated online gambling industry," said RGA Chief Executive, Clive Hawkswood.

"It also runs the risk of further challenges at EU level because the level of restrictions are such that they could be considered unacceptable barriers to market entry."

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