French regulator ARJEL has granted the request of four companies to have French licences annulled, as the tough tax regime continues to take its toll on the regulated market.
Italian operator SNAI opted to revoke its sports betting licence before even launching in the dot.fr market, while bwin.party subsidiary Electraworks’ licence covering Partybets.fr and Gamebookers.fr was repealed, after these businesses were consolidated under bwin.fr in April, following the parent group’s merger of its struggling Sajoo.fr joint venture with the Amaury Group into bwin last summer.
In poker, ARJEL granted Full Fun SAS’ licence repeal request, following the merger of its PokerXtrem.fr website into fellow Microgaming/888 skin Mypok.fr in July. Titan.fr owner Nation Traffic SAS’ licence was also annulled, following its withdrawal from France on 30 July.
July turned out to be a particularly bad month for smaller operators in France, with Iliad Gaming pulling its Chilipoker.fr and Chilipari.fr brands and Italian operator Winga also leaving the poker market. Iliad’s chief development officer Thomas Reynaud blamed the competitive environment and the tax level, which he said “does not leave space for new entrants or to operate viably.”
Just 25 entities licensed by ARJEL since 2010 remain active in the regulated French market, and just 35 licences, due to the difficulty of building a sustainable business under the current tax system. Full Tilt’s licence was also suspended last July due to financial irregularities. While ARJEL has recommended the French government levy taxes on gross gaming revenue as opposed to stakes – the 8.8% turnover tax on sports betting is equivalent to 50% of GGY – the issue currently lies far down the priority list of the new French administration.
The combination of high tax rates with no casino to mitigate risk is argued by private operators to favour land-based monopoly incumbents PMU and FDJ and increase the appeal and value of the offer available on offshore sites, hindering the growth of the dot.fr market.
French operator BetClic Everest, owner of the BetClic, Everest Poker, Expekt and Bet-At-Home brands, announced a net loss of €90m in 2011 due mainly to the tax conditions in its core French market. LB Poker, jointly owned by former French lottery monopoly FDJ, land-based casino company Groupe Lucien Barriere and On Line 3D Gaming, also reported a sizeable net loss of €30m, off a turnover of just €3.37m.
A host of leading pan-European operators, including London-listed Willliam Hill, Sportingbet, Betfair and Ladbrokes, decided against entering the ringfenced dot.fr market due to the huge entry costs and the margin impact of the high tax rates.