Graham Wood, director of the iGaming Consultancy, looks at the task facing ARJEL’s new President.
French punters may be hopeful that a change at the top of the country’s gaming authority ARJEL could mean a change of direction, but it is likely that they will be disappointed. Jean-François Vilotte, the outgoing President is likely to have left because he failed to get approval for reforms that were designed to improve the sector. The new President, Charles Coppolani, is certain to tread cautiously if he wants to keep his job, so it is likely to be business as usual at least for the short term.
Coppolani was previously President of the ODJ, the body set up in 2011 to monitor the gaming sector, and also worked for the Economy Ministry. His declared aim is to “find the best balance between two fundamental objectives: the need to protect players and the application of measures the will help licensed operators”.
How best could Coppolani achieve his aims?
One of his key goals is to protect players. At the moment France has one of the lowest per capita spends on online gaming in regulated markets. To most observers in the gaming industry the extremely low figures mean only one thing: punters prefer to bet offshore.
This is certainly the case in Italy where the authorities freely admit that offshore gaming sites continue to attract custom from Italians even though there is a regulated offer from licensed operators. GGR generated by “illegal” casino sites amounts to €300m a year according to government estimates, stakes placed with unlicensed bookmakers runs into the billions. So to protect French players Coppolani needs to make the regulated offer from French licensees more attractive to the country’s gamblers.
In order to do this he needs to look at taxation. It is no coincidence that sports betting in France and Italy shares the same problem: volumes are relatively low compared to other markets and anyone serious bets offshore as the heavy tax on turnover (7.5% and 4% respectively) makes the odds less attractive and the restrictions on the offer makes the product unappealing. A tax on GGR of even 20% would revolutionise the sector. Liberalisation of the product offer would be a very necessary icing on the cake.
Outgoing president Villotte wanted it, the Italians most definitely are keen on it and the Spanish could really do with it. Joint liquidity for online poker would revitalise the product that has been restricted by the walled-garden approach adopted by individual governments so far. If France, Italy and Spain joined forces, the online poker business would see considerable growth after several years of decline.
Online casino games are seen as a necessary evil by many, and by others just as an evil. But the Italian regulator has shown that with sensible responsible gaming measures in place, the product can be offered to the public without causing problem gambling. Indeed many studies show that online casino games do not create the problems associated with offline slots and VLTs primarily because of the controls (self-exclusion, stake/deposit limits etc) that are in place.
For the French, the cat is out of the bag and online gaming is a reality. Even before regulation it was already big business. Now it is even bigger but most of the money is heading offshore. Politicians may be able to declare that the liberalisation has been a success as there has only been modest interest in the product and problem gambling hardly exists. However as most online punters probably prefer to play with .com sites there is an inconvenient truth out there. Worse still, licensed operators are beginning to vote with their feet and hand back their licences as the current regime allows few besides the original monopolies PMU and FdJ to actually make any money.
Villotte oversaw a flop that got worse as time went by, Coppolani has to choose whether he is going to offer more of the same or be remember for making a difference.