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France to rethink online betting tax

Since online gaming was legalised by the French authorities back in July 2010, some betting operators have removed themselves from the market due to high taxes making it difficult to make much of a profit. Now, in a move that signifies just how much the French government want the online betting sector to be successful, discussions over changes to the current tax structure have begun.

Regulators of the online betting industry in France begin discussions over proposed changes to tax obligations

ARJEL (Regulatory Authority of Online Games) has proposed new guidelines to the government, which included 65 potential changes to be made. There are various proposals for the change in tax- one such idea is to base the tax on the total Gross Gaming Revenue (GGR).

Another suggestion is a stepped tax, which would include 55% levied on horse betting, 38% for sports betting, and 25% for poker income. This is the most popular solution, supported by many of the online operators who believe this style of taxation would allow them to be more competitive in the market.

UMP deputy Jean-François Lamour, however, is against making changes, and instead is looking for a flat tax of 20 percent on every gaming product that online betting shops have to offer. This has been adopted by other countries, and has just been proposed by the Danish government as the level of tax they will charge licensed operators. Most operators oppose this approach, advising that it reduces profits and inhibits competition.

Whatever the final decision, ARJEL has been praised by industry experts for its approach to the problem, as it has been careful to listen to the points of view of operators, government and consumers. The open discussion will cover all proposed changes, including the return rates to players.

OCA News Editor

Jenny McKinnley is OCA’s financial correspondent. After spending years on the trading floor in both NY and London, she offers insight from the inside out on world financial news and events.