French government close to collapse as Betclic CEO claims tax hikes will “destroy” market
Nicolas Béraud issues a scathing assessment of proposals, though the planned increases could be put on hold with Prime Minister Michel Barnier facing no confidence vote
Betclic CEO and president of French online gambling trade body AFJEL, Nicolas Béraud, has warned tax hikes in France will “destroy the legal online gaming market”.
On 25 November, the French Senate approved amendments to the country’s Social Security Code, which included a notable tax increase for the gambling industry.
Currently, France’s debt sits at nearly 6% of its GDP, nearly double the 3% permitted to EU members.
It was hoped that the tax rises on gambling operators, among other corporations, could generate as much as €60bn.
Under the proposed plans, the online casino tax rate was expected to jump from 11.2% to 11.9%, while lottery games would see a rise from 6.2% to 7.2%.
Online sports betting would face the steepest increase, with the tax rate climbing from 10.6% to 15%, while retail sports betting tax would increase from 6.6% to 7.6%.
However, those plans could now be scrapped entirely, as the French government teeters on the brink of collapse after French MPs rejected Prime Minister Michel Barnier’s 2025 Budget.
Barnier said he would push the social security element of the Budget through parliament without a vote, leading to MPs actioning Article 49.3, a constitutional measure allowing for a vote of no confidence.
The prime minister will now face vote of no confidence, which has been driven by La France Insoumise (LFI) and Marine Le Pen’s Rassemblement National (RN), representing a lack of faith from both sides of the political spectrum.
The vote is expected to be held today, with Barnier’s administration only having been in place since September.
Meanwhile, Béraud delivered a scathing opinion piece in financial newspaper Les Echos, in which the Betclic chief insisted the planned rises were “unsustainable” for operators, and they will “not be able to cope”.
“The exorbitant taxation of gambling, decided by the joint committee in charge of finalising the social security financing bill, will cause such a detonation that it will destroy the legal online gaming market,” Béraud claimed.
“By proposing excessive increases on online sports betting and online circle games, and nothing or almost nothing on other types of games, the members of the joint committee have decided to sabotage the competitive structure that has been difficult to put in place since the 2010 law.
“Such a decision could even be seen as disguised state aid, intended to favour the historic monopoly of La Française des Jeux, by aggravating the tax distortion with its private competitors.”
Béraud added that “thousands of jobs” could be at risk, while operators’ fiscal commitments to French sport could be revoked, leaving a €50m blackhole each year.
He continued: “Such relentlessness against licensed online gaming operators is incomprehensible because it amounts to automatically favouring offshore operators, who free themselves from any legal constraints.
“These excessive increases will push half of the legal operators in France into the precipice, thus reinforcing the concentration of the sector and reducing the tax base by the same amount. We are walking on our heads.”
With Barnier’s government expected to be the shortest-lived in France’s political history, a new budget will need to be voted on by a new government.
However, after President Emmanuel Macron called a snap election this summer, France is unable to hold another set of parliamentary elections until July 2025 at the earliest. Instead, Macron would be required to appoint a new cabinet.
In turn, the 2024 Budget will have to be adopted, meaning the French gambling industry will evade Barnier’s significant tax increases for the time being.
The framework for France’s online casino legislation was drawn up on 19 October, proposing that operators within the sector would be subject to a 55.6% tax rate.
The government soon rowed back on the plan after it was met with backlash from land-based outfits.
Instead, a consultation process has now begun to determine the most suitable path forwards after land-based casinos insisted the legalisation of online casino would lead to job losses and budget restrictions across local municipalities.