Building a Wall around France

2 March 2007

The French Parliament has adopted online gaming provisions, including a law on delinquency prevention.

The measures contained in the draft bill have been summarized for IGN by Evelyn Heffermehl of the law firm Ulys. They are as follows:

  • The fines against operators of illegal online gaming sites will be doubled from 30,000 euros to 60,000 euros for sports betting and lotteries operators and from between 45,000 euros and 100,000 euros to between 90,000 euros and 200,000 euros for horse betting operators.

  • The fines for illegal advertisers for online gaming operators will be from 30,000 euros, with the possibility for courts to multiply this fine by four times the amount invested in advertising expenses. This provision encompasses the advertising of all types of gaming operators: sports betting, lotteries, gaming house, casinos and poker. It will take in effect six months after that the bill will take in effect.

  • Internet service providers will have to clearly inform subscribers of the gambling sites that are considered inappropriate by the Home Office and will have to advise them on the risks associated to playing on illegal sites. The sanction for failing to comply will be up to one year imprisonment and a 75,000 euros penalty. An implementing act will still be needed to determine the concrete terms and conditions of application of this latter provision.

  • The organizations, institutions and services falling under the scope of Part I of the fifth Book of the Monetary and Financial Code (credit institutions) will have, under decision by both the Finance Ministry and the Home Affairs, to stop the flow of funds from companies and individuals which run gaming or betting activities that are considered as illegal under French law. The Finance Ministry and the Home Office will decide upon the blocking of funds for a 6 months renewable term. An implementing act will still have to decide on the concrete terms and conditions of application of this latter provision.

The parliament, i.e. both the Assemblée Nationale and the Senate, voted on the text on Feb. 22, 2007. The constitutional council was seized on Feb. 26. In principle, the council must deliver its opinion within one month. The effect of the council's decision is that if a provision is declared contrary to the constitution, it cannot enter into force.

The bill will still be subject to implementation acts, and the measures against online gaming operators will not be immediately applicable (the time frame is six months).

The European Betting Association (EBA), representing the main licensed and regulated online gaming operators in Europe, regrets this legislative evolution on the grounds that it not only favors the French State and its gaming monopolies to the detriment of punters and European operators, but it also exacerbates France's contravention of European law.

Despite the refusal of the French public authorities to engage in a meaningful debate, the EBA reaffirms its support of a market open to licensed and regulated European operators and for freedom of choice for French consumers.

The EBA reaffirms that the forthcoming application of the online gaming dispositions is going to penalize three categories of persons (French punters; French sport, media and other partners; and licensed and regulated European gaming operators). Their activity in France will continue to be stifled due to the aggressive intimidation tactics taken by the French authorities against them and suppliers to the industry. Companies and executives of licensed regulated and often publicly listed businesses will be further criminalized and encounter strengthened financial and criminal penalties.

The EBA sent an open letter to French Prime Minister Dominique de Villepin; it remains unanswered.

As of today, the EBA maintains its position that the monopoly model is not the only or even the best way of protecting the consumer. The state monopolies do not propose any guarantee in terms of protection of minors and the fight against addiction, and in fact abuse their position to market and sell products to minors.

The association also maintains that protectionism and prohibition removes the legitimate operators and leaves consumers at the mercy of less reputable providers.

The EBA calls on European member states, including France, to recognize what it interprets as the right, enshrined in EU law, for operators based and licensed within the EU to offer their services to residents of all member states. This position relies on the Treaty of Rome and the jurisprudence of the European Court of Justice case law, which recognizes freedom to provide services.

The European Commission has already launched an investigation as part of infringement proceedings to determine whether France has failed to comply with its obligations.

The new regulations are viewed by the EBA as a further step by France in attempting to protect an illegitimate and unjustifiable regime.

The EBA will also carefully analyze the decision of the European court of justice in the Placanica case regarding the compliance of the Italian legislation with European law, as this will provide guidance to the wider situation in Europe in respect of online gaming and betting. The verdict will be announced Thursday.

Rob van der Gaast has a background in sports journalism. He worked for over seven years as the head of sports for Dutch National Radio and has developed new concepts for the TV and the gambling industry. Now he operates from Istanbul as an independent gambling research analyst. He specializes in European gambling matters and in privatizations of gambling operators. Rob has contributed to IGN since Jul 09, 2001.