AFJEL Warns of Dire Consequences for French Online Gaming Sector Amid Proposed Tax Increases
The French Online Gaming Association (AFJEL) is sounding the alarm over the government’s plans to increase taxes on regulated online gaming operators by a large margin. The association says this could be disastrous, with job losses, business closures and an explosion of illegal gambling.
Tax Hike Could Kill the Sector
AFJEL is surprised and disappointed by the President of the National Gaming Authority (ANJ) recent statements in support of the tax increase.
The association warns this could be catastrophic : destruction of businesses, loss of jobs and weakening of the regulated online gaming sector.
AFJEL says the increased tax burden could also undermine support for key ecosystems (sports and horse racing) and push players towards illegal gambling sites.
Taxes Already Higher Than the European Average
AFJEL points out that France already has one of the highest tax rates on operators in Europe with a total deduction of 64% of the Gross Gaming Revenue (GGR).
This includes 54.9% on sports betting which covers the state, the National Sports Agency and Social Security, plus other charges like betting rights and VAT.
According to AFJEL, under the new tax regime this would go up to 74% and would be devastating for the sector.
Online Poker and Horse Racing
Besides sports betting, other forms of gambling like online poker and horse racing betting would also be severely impacted by the tax increase.
For horse racing betting the tax rate would go from 6.9% to 15% and the total tax would be over 60% of GGR.
AFJEL warns this would be disastrous for the industry, with potential cuts in funding for horse racing which receives €850m per year and many job losses.
Sector contraction and job losses
The association foresees a dark future, with the number of licensed operators in France already down from 40 in 2010 to 17 today.
If the tax measures are implemented AFJEL fears this could go down to 5.
This would leave the sector exposed to illegal gambling operators as the disappearance of legal operators would remove the last safeguards for players against fraud and addiction.
Negative Impact on Public Health and the Illegal Market
AFJEL also highlighted the potential public health risks associated with weakening the legal online gaming sector.
The association warned that higher taxes would not help combat gambling addiction but would instead push more players toward illegal operators, who do not adhere to the same standards for player protection.
As the illegal market continues to grow, it could undermine efforts to tackle money laundering and cybercrime while depriving the government of tax revenues from legal operators.
Urgent Call for Action
In conclusion, AFJEL has called on public authorities to reconsider their approach and focus on combatting the illegal market rather than overtaxing legal operators.
The association stressed that the proposed tax increases would only exacerbate the existing issues within the industry and urged the government to take swift action to reverse the trend of illegal gambling.
AFJEL represents nine major online gaming operators in France, including Betclic, Betsson, Flutter (Pokerstars), and Pari Mutuel Urbain (PMU), among others. Notably, Kindred (Unibet) has recently been acquired by the FDJ, further highlighting the consolidation occurring in the French online gaming sector.
