Impacts of Euro 2024: Insights on France's Illicit Gambling Participants and Its Market Struggles
Rewritten Article:
It seems the French Online Gambling Association (AFJEL) has faced a rough patch, as reported by iGB. The Association anticipated a whopping 1 billion euros in revenue, but the actual figure was alarmingly short of the mark. This stark contrast can be attributed to the 2022 World Cup betting, where bettors placed 900 million euros on France reaching the final.
The explanations for these disappointing figures are obvious. Despite the presence of 3.6 million players utilizing the services of licensed operators in 2023, a staggering 4 million chose to bet with unlicensed operators. The experts at the association pin the blame on inadequate regulation, exorbitant taxes, and a scarcity of legal online casinos in the country. It's no shock then that the betting market didn't grow in 2022 and 2023, with some companies even experiencing a decline.
Nicolas Boro, the president of AFJEL, voices his concerns, stating that blocking illegal sites has been ineffective in stemming the growth of the black market. "If Euro 2024 showed dismal results for licensed operators, the illegal market is currently on a rapid expansion, engulfing the online sports betting sector and enticing players away from legitimate offerings," he explains. Unlicensed companies usually reel players in with tempting odds, and not every player considers the risks.
However, the narrative is not entirely straightforward. The National Gaming Authority (NGA), responsible for regulating the gambling market, claims that the industry achieved a record Gross Gaming Revenue (GGR) of 13.4 billion euros in 2023. Such discrepancies are common in the industry, for example, in Germany, the regulator asserts that the market is almost free of illegals, with them accounting for only 4% of GGR. However, critics argue that nearly half of users remain loyal to offshore companies.
As we delve deeper into the issue, it becomes apparent that France's stringent regulations on online gambling could be the primary cause of this conundrum. France prohibits online casino games like blackjack, roulette, and slot machines, allowing only sports betting, horse racing, and poker. This restrictive climate gives rise to a black market, where French residents turn to unregulated platforms in search of their gaming fix. Factors contributing to the growth of the black market and the subsequent decrease in regulated revenue include:
- Restrictive Regulations: The ban on online casino games pushes players towards unregulated sites, which operate without legal protections and oversight, resulting in substantial revenue being diverted from regulated channels.
- Consumer Demand: Despite the ban, there remains a strong demand for online casino games. Unregulated platforms cater to this demand, allowing them to flourish despite their illegality.
- Lack of Consumer Protections: Being exempt from consumer protection laws allows unregulated platforms to offer tempting bonuses and options that regulated sites might not be allowed to offer.
- Tax Revenue Loss: The black market in France generates substantial revenue, estimated between €748 million and €1.5 billion annually. This revenue could be captured by a regulated market.
- Proposed Legalization and Taxation: A proposed amendment to legalize online casinos includes a hefty tax rate of 55.6% on GGR, which might deter operators and encourage the black market if not properly managed.
In conclusion, while there might be some conflicting reports, these factors would generally contribute to lower-than-expected revenue in regulated online gambling in France and the growth of the black market. It's a complex issue that requires careful consideration and strategic solutions to navigate effectively.
- The French Online Gambling Association (AFJEL) estimated a revenue of 1 billion euros in 2023, but actual figures fell significantly short, with 900 million euros reportedly spent on World Cup betting.
- The association attributes the shortfall to inadequate regulation, high taxes, and a limited number of legal online casinos, leading 4 million players to resort to unlicensed operators.
- President of AFJEL, Nicolas Boro, expressed concern, stating that blocking illegal sites hasn't slowed the growth of the black market.
- The National Gaming Authority (NGA) reports a record Gross Gaming Revenue (GGR) of 13.4 billion euros in 2023, yet critics argue that nearly half of users remain loyal to offshore companies.
- France's stringent regulations on online gambling, allowing only sports betting, horse racing, and poker, contribute to the growth of the black market, as players turn to unregulated platforms.
- Restrictive regulations, consumer demand, lack of consumer protections, tax revenue loss, and proposed heavy tax rates are factors contributing to the growth of the black market and the decline in regulated revenue.
- The sports betting sector is enticed by the illegal market's tempting odds, and not every player is aware of the risks associated with unregulated platforms.
- The growth of the black market and declining revenue in regulated online gambling necessitate careful consideration and strategic solutions to navigate this complex issue.
- The future of personal-finance, fintech, technology, business, and even sportslike football and the Champions League in France may be influenced by the outcome of these strategic decisions in the gambling industry.
