Nicolas Béraud, the CEO of Betclic and president of the French online gambling trade association AFJEL, has issued a stark warning that heightened taxes in France could devastate the legal online gaming sector.
On November 25, changes to France’s Social Security Code were given the green light by the French Senate, including a significant tax increase for the gambling industry.
France’s national debt is currently approaching 6% of its GDP, which is nearly twice the 3% threshold allowed for EU countries.
The government had anticipated that increasing taxes on gambling businesses and other sectors might help raise as much as €60 billion.
Under the proposed measures, taxes on online casinos were set to rise from 11.2% to 11.9%, while lottery games would experience a jump from 6.2% to 7.2%.
The highest increase was slated for online sports betting, with the tax rate rising from 10.6% to 15%, and retail sports betting taxes moving from 6.6% to 7.6%.
However, these proposals might now be shelved indefinitely as the French government faces potential collapse. French MPs have rejected Prime Minister Michel Barnier’s 2025 Budget.
In response, Barnier plans to push through the social security segment of the Budget without parliamentary approval, invoking Article 49.3, a constitutional move that allows a vote of no confidence.
Barnier is now facing such a vote, spearheaded by both La France Insoumise (LFI) and Marine Le Pen’s Rassemblement National (RN), signalling disenchantment from across the political divide.
The vote of no confidence is set to occur today, despite Barnier’s administration only being in power since September.
Meanwhile, Béraud expressed strong opposition in a critical piece for the financial newspaper Les Echos, arguing that the proposed tax hikes are untenable for operators and could become unmanageable for them.
He described the new taxation on gambling as being so excessive that it was set to “obliterate the legitimate online gaming market.”
Béraud emphasized that the joint committee’s decision to significantly increase taxes on online sports betting and online games, yet place minimal additional burden on other forms of gambling, amounted to sabotaging the competitive landscape established since the 2010 law.
According to Béraud, these moves could potentially be seen as disguised governmental assistance to favor La Française des Jeux’s monopoly by increasing tax disparities with its private competitors.
He further warned that “thousands of jobs” are at risk, and gambling operators’ financial support for French sports might be revoked, creating a €50 million deficit annually.
Béraud concluded, “Such excessive pressure on licensed online gaming operators is perplexing because it inadvertently benefits offshore operators who flout legal restrictions.”
He warned that these substantial tax hikes could force half of France’s legal operators out of business, reducing the tax base and increasing industry concentration.
With Barnier’s government poised to be one of the shortest-lived in France’s history, a new budget will have to be voted on by a newly assembled government.
Following President Emmanuel Macron’s call for a snap election this past summer, France cannot conduct another parliamentary election until July 2025 at the earliest. Instead, Macron would need to designate a new cabinet.
In this transition, the adoption of the 2024 Budget will prevent the immediate implementation of Barnier’s substantial tax increases on the gambling industry.
The initial framework for France’s online casino law, drawn up on October 19, indicated that operators would be taxed at a rate of 55.6%.
However, the government quickly backed off from this initiative after encountering strong opposition from brick-and-mortar establishments.
A consultation process is now underway to chart a viable course forward, following concerns from land-based casinos that legalizing online casinos could lead to job losses and budget constraints for local authorities.