online gambling: finnish and french models virve pöysti · 2014-03-28 · • online sports...

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Online gambling: Finnish and French models

Virve Pöysti University of Helsinki Department of Social Research

12.1.2012


1



Online gambling in Europe

No online gambling markets

• Finland, Sweden, Portugal, Slovenia,

Czech Republic

Partly deregulated online gambling

markets

• France, The Netherlands,

Belgium, Bulgaria, Spain, Ireland,

Austria, Cyprus, Lithuania, Poland,

Romania, Germany,

Denmark, Hungary

Fully or almost fully deregulated online gambling markets

• UK, Italy, Latvia, Luxembourg,

Malta, Slovakia, Estonia

- Three models of online gambling in Europe (www.senat.fr)



Online gambling in Finland (1)

- In principle only online gambling offered by monopolistic gambling providers allowed (RAY, Veikkaus, Fintoto) - Online versions of offline games - RAY online casino also offers poker and other casino games (www.ray.fi/kasino)



Online gambling in Finland (2)

- However, no legislative means to ban overseas online casino offer in Finland. - Online gambling on foreign sites is not illegal and any wins can be cashed in. - Promoting online gambling offered by others than the Finnish actors is illegal. - Online casino offer in Finnish by PAF and countless overseas providers (63 counted in 2010)



Gambling in France

La française des Jeux • State owned company (72% ownership) • Traditional monopoly provider of lotteries and

betting on sports

Pari mutuel urbain • State controlled economic interest group

composed of 51 racing authorities • Traditional monopoly of betting on horses

Private casinos • 196 casinos in France, largest groups Partouche

(45 casinos) and Barrière (33 casinos) • Sole providers of EGMs and casino games



Online gambling in France: Situation before 2010

- Online versions of traditional games available on the websites of PMU and FDJ (lotteries, scratch cards, betting on horses). - Action against overseas providers: • 2005: Zeturf vs. PMU • 2006: Bwin arrests following a complaint made by FDJ • 2007: A law forbidding advertisement of unauthorised gambling provision in France. Violators are subject to fines and a block of financial transactions. • 2009: FDJ challenges overseas competition (e.g., Betclic, Bwin) by opening an online sports betting service.



Online gambling in France: The law of 2010 (1)

- Law 2010-476, 12.5.2010 partially opens the online gambling market to operators from other EU countries.

- Passed due to EC request to open the market. - The law aims at: • Opening online gambing markets to competition by granting publicly controlled licenses. • Increasing the offer of online gambling by legalising new games (poker) • Channelling illegal gambling to authorised websites. • Protecting consumers (preventing problem and excessive gambling)




- Three types of licenses granted: • Online sports betting • Online horse race betting • Online poker

- Games that remain illegal: • Online casinos (other table games besides poker) • Online EGMs • Spread betting • Lotteries and scratch cards for other providers than FDJ

- According to the lawmakers, these games remain illegal due to their addictive nature. Poker is legalised since it is considered partly a game of skill.




- Any licensed operator is subject to:

• A tax of 7.5 % on all bets placed on sports or horse race betting services and a tax of 2 % on all bets placed in poker. • Have a French address. • Prevent problem gambling.


- Currently 19 authorised operators with a total of 50 websites proposing gambling (www.arjel.fr) - Number of providers is going down (26 in 2012) - Traditional operators:

- And new providers (including):


Online gambling in France: New operators

Authorité de Regulation des Jeux en Ligne Authorité de Regulation des Jeux en Ligne


- ARJEL (l’Autorité de régulation des jeux en ligne) authority designed to regulate online gambling (2010) • Licenses online gambling providers (5 year licenses) • Defines the technical and legal obligations of operators. • Control over authorised providers. • Ŕevokes licenses when required • Fight against illegal online gambling provision

- Obligations of consumer protection imposed on providers: • Registration of all users, age limit of 18. • Limitations of accounts. • Some (FDJ) also use Playscan


Online gambling in France: Measures of control



Online gambling in France: Illegal online gambling? (1)

- About 15-20 % of online gambling still occurs on illegal sites (senat.fr)

- Penalties imposed on unauthorised providers offering services in France: A possibility of 3 years of imprisonment and a fine of 90 000 € (or more if organised crime).

- Fine for advertising a unauthorised provider (20 000 € minimum).

-Blocking financial transactions of unauthorised sites in France or preventing access to unauthorised sites from French IP addresses.



Online gambling in France: Illegal online gambling? (2)



Online gambling in France: Since the law of 2010

- Positive feedback from the European Union: • Consumers have more choice. • A legal alternative to illegal online gambling.

- But also criticism: • Small online operators: The system benefits national and big operators. • Brick-and-mortar casinos losing clientele. • Authorised operators: Costs of offering legal gambling too high to compete with illegal offer. Low return percentages (85 %), limited offer of games. Some providers have relinquished their online activities as unprofitable (Partouche).



Online gambling in France: Popularity

- Online poker: Initial success but popularity has since declined.

- Sports betting: slow start but improvement since 2012. Horse race betting is stagnating.

-The traditional providers persist are even the great benefitors from the law of 2010. Profits of PMU and FDJ rising.

Lähde: Le Figaro 7/2/2012



Conclusion: The French model and Finland?

- Following the law of 2010, online gambling markets in France have been partially opened to outside providers.

- The change has had more political than market impact: FDJ and PMU maintain their positions as market leaders. - Is it neccessary to fear the end of gambling monopolies in Finland? Or would the French example indicate that consumers remain loyal to traditional providers?

- All consequences of the reform in France cannot yet be known. But following the French situation may offer interesting alternatives to Finnish online gambling policies.

online gambling: finnish and french models virve pöysti · 2014-03-28 · • online sports...

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