New government’s tax hikes set to increase burden on “most heavily taxed sector” in Europe, says casino trade body, with online operators’ marketing spend also set to be targeted
France is preparing to increase taxes on its gambling companies as part of new Prime Minister Michel Barnier’s plan to raise €500m that would go towards reducing the country’s debt levels.
The French newspaper Les Echos reported that Barnier’s government will publish its plans on Thursday to boost the coffers of the country’s social security apparatus by levying higher taxes on French land-based casinos, Francaise des Jeux’s retail lottery and sports betting activities and online poker operators, while online sportsbooks and horse racing sites would take the biggest tax hit of all.
The tax hikes are expected to bring in €1.6bn that would go towards family health and social care provision, compared with the €1.2bn expected originally. The government could include the changes in primary legislation or via amendments during the forthcoming parliamentary debates on the country’s budget
Currently operators pay a social contribution that is levied as a percentage of their gross gaming revenues (GGR), with retail sports betting taxed at 6.6%, horse racing pari mutuel at 6.9%, lotteries are at 8.4%, physical slot machines and online sports betting are at 10.6%, online poker’s GGR tax would rise from 0.2% to 1%, while casino GGR of more than €1,500 is taxed at 16.7%.
With the sector heavily reliant on marketing and advertising to recruit players, the government is also planning to tax its media and advertising spend and to levy taxes on financial rewards and bonuses for customers, influencer marketing and sponsorship budgets.
Betting to carry bigger Tax burden
Sports betting and horseracing operators will be worst hit by the new measures, with horseracing tote companies’ GGR tax set to rise to 10% for retail bets and to 15% for all sports bets. Online bookmakers like Betclic, NetBet or Winamax already pay around 55% in GGR taxes.
The social levy on GGR would rise to 9.2% for lottery and casino and would be calculated on the entire GGR generated, as opposed to the current method where only 68% of slot machine revenues is taxed.
Gaming establishments (cercles de jeux) based in Paris are currently exempt from any social security contributions and would be required to pay 10% of their GGR as part of the new measures.
Casinos de France, the trade body representing the country’s 200 land-based casinos, said it already contributes more than €1.5bn in taxes to the French government and local communities every year, which equates to nearly 57% in taxes on GGR. It added that it would put at risk 45,000 jobs generated by the sector and that the planned 10% GGR tax on Paris gaming establishments would be “signing their death warrant” and would directly put at risk 1,500 jobs.
Grégory Rabuel, CEO of Barrière Groupe and President of Casinos de France, said the “increase in taxation would worsen an already difficult situation for our sector, which is the most heavily taxed in Europe” and that French casinos already contribute “57% of our turnover (in taxes), well above the level of taxation imposed on other economic activities” such as those of online giants such as Google or Amazon.
Tax hike holds an uncertain impact
Les Echos said the government acknowledged that data was lacking on how the tax rises would impact demand, but estimated that it could lead to a 5% drop in activity.
France’s gambling GGR was up 3.8% to €5.5bn in the first half of 2024 compared with the same period last year, with FDJ up 5.5% to €3.5bn and online sports betting GGR rising 10.5% to €1.3bn and active player numbers up 13% to 4.3 million.
Last year France’s national auditor the Cour des Comptes revealed that in 2021 the country’s gambling sector had paid around €5bn in taxes and €1bn in social security contributions and pointed out that “France stands out for its high rates of tax”, which are 20 points higher than in neighbouring countries for lotteries and three to 10 points higher for sports and horse racing betting.
Healthcare anxieties justify tax increase
As part of its proposal, the government will argue that the taxes are justified by the growing number of gamblers and problematic gambling addictive behaviours in recent years. It added that 6% of gamblers, around 370,000 players, are at risk of moderate or excessive addiction.
The only current statistics on the issue date back to 2019, with France’s Gambling Observatory estimating that the number of at-risk gamblers was 1.4 million and almost 400,000 were at pathological level. A new study on the topic is expected by the end of the year.