France To Regulate Online Poker, Taxed at 2.5 Percent

France yesterday announced it is to open the online gambling market, including online poker, from Jan. 1 2010 in a move designed to stymie currently illegal betting which is worth €7 billion.

Budget minister Eric Woerth said there was “no use denying the reality of online gambling and the expectations of French people”.

However, news that online poker operators would be taxed at 2 percent and sports betting companies at 7.5 percent met with a mixed reception from the industry.

The European Gaming and Betting Association said, “The EGBA welcomes the announcement by the French Government to open up  its online gaming and betting market. EGBA wonders for instance whether the proposed model will be economically viable given the announced level of taxation, the limited payout ratio to players, and the creation of new rights to the benefit of organizers of sports events.”

Analysts Daniel Stewart & Co said, “Although the proposed taxes appear relatively high, the move from a State monopoly on horse betting (Pari Mutuel Urbain) and gaming/sports (Francaise des Jeux) to an open field should prove highly beneficial to a number of the key operators in our gambling universe.

“We believe that the ability to compete on an even-keel with the State operators, notably being allowed to advertise and market freely, will outweigh the potential tax burden, augmenting returns for operators with a licence (we believe licences will be granted to most operators in our listed universe given their high levels of accountability and governance).”

The bill will bring an end to the current monopolies enjoyed by Pari Mutuel Urbain, the state horse race betting operator, and Francaises des Jeux, which runs lottery games and sport betting for the government.

The Financial Times said some of those expected to apply for licences were Lucien Barriere and Partouche, and French-based TV channel Eurosport.

Chilipoker.com recently announced a partnership with French Internet service provider Iliad in anticipation of moving swiftly into the poker market there.

The proposed bill, which includes rules  to set limits on the ratio of bets that can be paid out to players in winnings, will be discussed in the French Parliament at the end of March or beginning of April.

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