French tax and payout limits a problem?

Online gambling execs speak out on high taxation and low limits on player payouts

The Monaco iGaming conference in Monte Carlo is generating interesting perspectives and opinions on the recently liberalised French market, and the perceived problems of high taxation and low limits on player payouts.

This week the newly appointed chief executive of 888.com's b2b arm Dragonfish, David Zerah opined that the taxation being imposed on French-licensed operators had probably gone a little too far and could detract from the advantages of entering the French market from a profits point of view.

He wasn't the only one; Alexandre Dreyfus of the ChiliGaming group said that although the industry was glad to see a more progressive approach from the French, it was desirable that casino games be included in the licensing spectrum, and that taxation be reduced. He pointed out that 40 percent of revenues was "painful" for operators, but added that there was an opportunity in the French market to expand and build effective brands.

Nicolas Beraud, the chief executive for the French Mangas Gaming group was concerned at the regulatory limit of 85 percent on what operators are allowed to pay back to players. Although this was designed to protect the consumer, it was proving to have the opposite effect by sending players to foreign sites offering better and more competitive returns, he observed.

Zeturf CEO Emmanuel de Rohan Chabot was also concerned about high tax levels and the 85 percent limit on payback, which was making the retention in the French market of French gamblers "very hard." He said that his company's experience was that the average gambler was losing around Euro 110 a month instead of the previous Euro 60 a month pre-liberalisation, and that the payback limit had to be regarded as a failure in terms of consumer protection.

Tarquin Henderson, a senior marketing exec from Mangas Gaming, pointed out that regulators ought to consider consumer perceptions of the market in order to fully realise the benefits of a more open gambling environment. The customer will choose what best suits him or her, he noted, adding that if the experience was unfavourable due to overly complicated use and unnecessary obstacles to play, or if he or she was getting less value from the gambling experience, then the punter would go elsewhere.

There has to be a sensible balance between consumer protection and providing an entertaining and fair gambling environment, he opined, warning that too extreme a positioning either way could lead to failure.

PMU's chief of international development, Aymeric Verlet, appeared to feel that clamping down on illegal operators was a more immediate priority than payback and tax issues. He argued that if illegal operators were prevented from operating in the French market, licensed operators could live with the tax issue.