French online gambling market is liberated

French minister says new law will put an end to the “wild and anarchistic” development of Internet gambling.

Despite determined left wing political resistance, the French National Assembly has passed a bill to legalise online gambling and open up the French market to international operators. Virtual poker machines and games of chance are not included in the law because they are considered too addictive to be legalised.

On Tuesday the National Assembly passed the bill, which provides for regulation in a frame work described by observers as the strictest in Europe, reports the publication France24. The law had already successfully passed through the French Senate earlier this year (see previous InfoPowa reports) and is now expected to become law well in advance of the World Cup football championships, which take place in South Africa mid June to mid July.

Budget Minister François Baroin said: “This law will allow us to gradually purify the black market of online gaming by creating a legal alternative", adding that the legislation would enable authorities to put an end to what he described as the “wild and anarchistic” development of Internet gambling.

Left wing opposition parties vigorously but unsuccessfully fought the law over a week of fierce debate and gave notice that they may take the issue to the Constitutional Court. “We have never examined a bill under such obvious and intense pressure from lobbies expecting a new law to satisfy their financial interests”, Socialist spokesman Gaëtan Gorce said.

The bill will be followed by a set of decrees which, once signed by the Minister, effectively brings the law into force. It is expected that the decrees will be signed next (May) month. ARJEL, the regulator in France, has already posted the requirements for an applying operator on its web site.

The decrees, which have remained confidential, were sent to the Commission earlier this year and the European Commission reply is expected at the end of this (April) month.

Associated Press reported that the online gambling sector generated nearly Euros 800 million in France in 2008, and will likely draw a variety of players - online bet organisers, sports clubs, and advertisers – to compete with state monopolies PMU and La Française des jeux if they are successful in obtaining licenses from regulator ARJEL.

In related news, the UK-based trade association representing online gambling companies, the Remote Gambling Association, criticised the new law, saying that it does little to truly facilitate a competitive and thriving market and that ultimately the burden will fall squarely on the shoulders of French players.

The RGA repeated its call for the draft law to be amended to bring it into compliance with EU rules.

"Even if the European Commission, as guardian of the Treaties, feels that a licensing system is sufficient to satisfy EU rules, the French law makes a mockery of a supposed "controlled opening", said Clive Hawkswood, chief executive of the RGA. "Whether it is the hundred plus pages of technical rules, the false limitation on payouts to players, the ineffective blocking mechanisms or the introduction of an unsubstantiated sports right, this system is, unfortunately, seriously flawed and will make it difficult for any private sector company to be successful, especially in the area of sports betting".

"While we have no access to the decrees which will define the secondary regulation of this sector, we are fearful that they will simply extrapolate the mechanisms in the primary law into more onerous detail," said Hawkswood. "The technical standards document has heightened these fears with technical issues which raise serious considerations as to the feasibility of the frontal server system. But the greatest fears are reserved for those areas which are nothing more than a smokescreen to protect the incumbent providers."

The RGA has received legal advice on the bill and remains committed to seeking all avenues of redress if the bill and its subsequent regulations appear to deny market opportunities to private operators, Hawkswood added.

"Our biggest concern is that this type of system is accepted by courts and the EU institutions as somehow a fair access system. It looks nothing like the Italian system for instance and runs roughshod over EU rules meant to provide operators access to EU markets. We hope the new Commissioner who oversees this dossier will continue to scrutinise this law and its negative effects on market access."

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