French Senate Approves Gambling Tax Hikes

Senate Endorses Tax Increases on Gambling, Raising Concerns in the Industry

French Senators have approved significant tax increases across gambling activities as part of Prime Minister Michel Barnier’s Budget 2025 plan. Designed to raise €500 million to address national debt and bolster the social security budget, the tax hikes include:

• Lottery GGR to be taxed at 10% (previously untaxed).
• Retail sports betting tax raised from 7% to 10%.
• Online betting tax increased from 10.5% to 15%.

Despite initial rejection by MPs, these measures were greenlit by the Senate, signaling potential financial challenges for operators and sporting organizations reliant on gambling revenue.

At the annual AFJEL conference, Betlic CEO Nicolas Béraud, who also serves as AFJEL President, voiced concerns over the reforms, stating:

“Higher taxes will make it even more difficult for operators to generate profits and put at risk many sports federations, leagues, and grassroots organizations.”

Jean-François Vilotte, CEO of the French Football Federation (FFF) and former gambling regulator, echoed these warnings, emphasizing that the tax increases could destabilize sporting bodies and compromise sporting ethics.

With French casinos and online operators already paying around 55% GGR taxes, the new measures could push this figure close to 60%, further straining profitability and sustainability in the sector.

FDJ’s Opposition to Online Casino Regulation Sparks Debate

At the center of another contentious issue is the French lottery giant, Fançaise des Jeux (FDJ), which has opposed the potential regulation of online casinos in France. Industry observers are questioning the motives behind FDJ’s resistance, labeling it as protectionist.

FDJ, which holds a monopoly on lottery, bingo, and instant games, benefits from higher margins on its products compared to typical online slots. For example:

• FDJ scratchcards and instant games: Pay-out ratios of 65%-72%.
• Online slots (if regulated): Pay-out ratios around 96%.

An industry insider noted: “Should iCasino become regulated, players are not going to be interested in games with pay-out ratios of just 70%. FDJ would have to compete with online casinos offering more appealing options.”

FDJ’s monopoly allows it to dominate the mass market without direct competition, a position that could be eroded if online casinos enter the market.

While some critics label FDJ’s stance as “hypocritical,” others argue it is a defensive strategy to maintain its exclusive market position. However, FDJ has positioned itself for potential regulation, having acquired Kindred Group for €2.6 billion earlier this year. Through this acquisition, FDJ now owns pan-European betting brands such as 32Red and Maria Casino, ensuring readiness to compete if the market opens.

Government Delays Online Casino Regulation Amid Industry Pushback

The government’s proposed online casino amendment, introduced shortly after FDJ’s Kindred acquisition, faced fierce opposition from casinos, mayors, and industry leaders. Following a roundtable discussion, the amendment was withdrawn, and the government will form working groups in January 2025 to further evaluate the issue.

FDJ defended its position, stating:

“Legalizing online casino would not meet the arguments put forward by its advocates, in terms of combating illegal and excessive gambling, contributing to public revenue, and balancing the gambling sector in France.”