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Calls for Changes in French Regulation Grow Louder

French regulatory body ARJEL has released its report for the third quarter of 2011, with amounts staked on sports dropping by 23% from last year. Sports gross gaming revenue slipped 24% from €38 million to €29 million and, across France’s 35 licensed operators, there were 104,000 fewer active sports betting accounts.

As results continue to disappoint, questions remain if France’s current model, which continues to squeeze operators’ profit margins, is sustainable. Calls for a change in taxation based on gross gaming revenue instead of amounts staked are growing louder.

The French model has not been as successful as its Italian counterpart because the market was set up to protect monopoly incumbents such as FDJ and PMU. As a result, it has received criticism due to its prohibitive tax rates, limited product range and cumbersome registration process.

ARJEL president Jean-François Vilotte has responded to the disappointing third quarter results by calling for a change in the taxation system.

Vilotte told Le Figaro that failing to make changes “is near certain to lead to a decrease in tax revenues for the State in the medium to long term and the illegal operators getting back to taking market share, which would be a concern for the regulator and the Treasury.

“We must…ask whether the current economic model will allow private operators to achieve a level of profitability without customers going to look for better illegal offers, hence the need for a change in tax system and a reflection on tax rates,” said Vilotte.

Last month iGaming France revealed that François Trucy’s calls for the adoption of a GGR tax would be considered in next year’s review of the French market. Trucy chairs the Comité Consultatif des Jeux.

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