France may eventually overhaul its rather clumsy online gambling taxation system after two MPs presented last week a report that called for the implementation of new measures regarding the regulation of the country’s gambling industry. iGaming taxation was among the topics discussed in their piece.
After it has become clear that France is inching closer towards establishing an online poker shared liquidity network with other regulated jurisdictions, a change in the way it taxes this type of offering was an anticipated move. The country regulated its iGaming market back in 2010. However, it can be said that it has one of the stiffest and over-regulated industries among regulated jurisdictions around Europe, particularly when it comes to taxation.
Under the existing French regulations, licensed operators are taxed on the total amounts staked and not on gross gaming revenue, as it is in other regulated markets. Here it is also important to note that in online poker, every single cash game pot is taxed at 2% in addition to the standard rake. This makes it rather difficult for both operators and players to profit from the game.
However, the current state of affairs may change, if the report presented by French MPs Régis Juanico and Jacques Myard strikes a chord with their colleagues from the French Parliament. Among many other things, the piece calls for a new taxation framework to be adopted, one that taxes operators on a gross gaming revenue basis and not on a percentage of their turnover.
Such a change will facilitate the establishment of an online poker network out of the merged player pools of France and other regulated jurisdictions. Shared liquidity has been a topic that has been broadly discussed for years, but it was over the past several months that major progress has been reached in that direction.
It became clear last year that the gambling regulators of France, Italy, Spain, Portugal, and the UK had started preparatory work on the potential merger of their player pools. Of all five countries, France is the only one to tax operators and players in a fundamentally different way. The French government will have to act quickly on an online gambling tax reform in order to be able to deliver on the promise for first online poker shared liquidity agreements to be reached by mid-2017.
The report compiled by MPs Juanico and Myard came several months after the results from an industrywide review by the French Court of Auditors showed that the country’s existing regulatory framework was too fragmented and rather ineffective.
The Court asked for reforms that would help the French gambling industry attract players, while providing them with a safe gambling environment. The country’s current gambling laws have long been criticized for being so stiff that they have driven customers to unregulated gambling operators.
