Operator licensees in the highly taxed dot.fr igaming sector more than halved their collective losses from the market last year to €85m, new figures from national regulator ARJEL have shown.
With annual gross gaming revenues from the market only increasing by €25m to €697m during the course of 2012, the reduction in losses to €85m from €183m in 2011 was mainly attributable to operators cutting their marketing spend in the slow-growing market.
Operators active in the dot.fr online sports betting, poker and horse racing betting sectors spent €255m on advertising and promotions last year, €59m or 19% less than the €314m they spent in 2011. The percentage of their revenue spent on marketing correspondingly fell to 37% from 47%.
They also slashed collective overheads to €168m from €204m, with online poker being responsible for the bulk of this reduction, ARJEL noted.
The operating losses were heaviest in the smallest online sector of all, sports betting, badly hindered by a prohibitive turnover tax, where operators lost a total of €40m in 2012, closely followed by online poker with €36m and horse race betting with €10m.
ARJEL however noted that the losses were not uniformly distributed across the sector, with “many” operators edging into the black last year.
“For the first time since the opening of the market, many operators have managed to achieve an operating profit in 2012,” observed the regulator in its analysis.
Online poker was the star performer as far as the improvement in operating income was concerned, where operators’ collective loss of €36m represented a improvement of €53m on the 2011 figure.
Operators paid a total of €327m in gaming duties to the French government last year, €20m more than in 2011. Once VAT of €32m was also factored in, operators paid the equivalent of half - 51% - of their gross profits generated in the dot.fr market to the French taxman.
Article written by Peter Holmes
