GPWA Times Magazine - Issue 13 - June 2010

estPokerandBetclicpokerwill create the playerpool for itsFrenchnetwork. Mangas Gaming has also signed a four- year deal with Métropole Télévision M6 to form an online gaming partnership. Mangas will sponsor sports and poker programs, and in return they’ll be offer- ing Internet gamingonM6Web sites.M6 is the second-most watched private tele- vision service inFrance. The common thread among all of these planned entries to the French market is largeoperators.Largeoperatorswithdeep pockets are poised to take advantage of France’snew law.And that’sbecause itap- pears that the regulationswillmake it dif- ficult for smallerplayers to succeed there. Ari Last, who works at right2bet – an organization dedicated to allowing EU citizens to be able to bet with whichever EU-licensed betting company they wish, regardless of inwhichmember state that company is based – describes the situa- tion thisway: “The problemwith the French bill is that it is ladenwith rules and regulations that in realitymake things extremely difficult for foreign competitors to enter themar- ket successfully. High taxes, limitations on the products one can offer plus strict rulesonacompany’ssetupandoperations are inessencebarriers toentry thatwill in many cases prove too steep for competi- tors toevenattempt to surmount. “What this means is that the position of the FDJ is strengthened, since on one hand the new legislation entitles them to advertise more and offer more services, while at the same time it dissuades the competition from posing a challenge. And thePièce deRésistance?The change appears under an umbrella of ‘legislative progression’ which the French hope will get the likes of us, and the Commission, off theirback.” The proposed tax rate for sports betting is 5.7 percent. The proposed tax rate for on- line poker is 1.8 percent. The tricky thing about these tax rates is they’re designed almost like sales taxes, and apply to each euro bet, rather than gross revenue. So in addition to charging a rake, online poker roomswillhavetofigureouthowtoaddthe 1.8percent “sales tax” into themixaswell. As a point of comparison, online poker companies licensed inMalta have to pay a5percent taxonnet income.Andonline sportsbooks pay 0.5 percent tax on the gross amount of bets accepted. In addition to tax rates, online gaming companies face additional hurdles if they intend to operate in France. For online poker, the pool for players is restricted to France. And online gaming services can only be offered to French residents through sitesusing .frdomains. As of press time, France’s new online gambling regulatory body Autorité de Régulation des Jeux En Ligne (ARJEL) had not announced detailed technical requirements for the online poker rooms and sportsbooks getting ready to enter the French market. The group did indi- cate that it expected to announce those requirements inmid-May. ENGLAND When the Gambling Act of 2005 was passed, and when its regulations on In- ternet gamingwent intoeffect in2007, it was hailed as “the regulatorymodel” for Internet gambling. It created the frame- work for a regulatedonline gambling in- dustry in theU.K. But it still gave online gambling sites licensed outside Britain an avenue to access itsmarkets through a combination automatically honoring the licenses of EU nations, along with Iceland, Liechtenstein, Norway and Gi- braltar, and of “white listing” other ju- risdictions for meeting British regula- tory standards. (Only four jurisdictions have been “white listed” – Antigua and Barbuda, the Isle of Man, Alderney and Tasmania.) 71 France and the U.K take a second look at their gambling laws