Capitalists trying to tap into the stingy French market have been hampered by peculiar laws that are designed to discourage competition with the state-run gambling monopolies Française de Jeux and PMU. The recently legalized French market did not fare any better with high taxes and strict compliance rules set by the government to keep the state-owned monopolies in power.
The legalization of the market means that major international companies such as BWIN from Australia, Partygaming from the UK, Mangas Gaming and Pokerstar, and about fifty companies in all are acquiring licenses. These operators will not be allowed to have casino games such as
online roulette, blackjack, slots, or video poker. The importance of these games to the competition is huge since they enter the high-risk industry of poker, horseracing, and sports betting where a loss could wipe out the house. Mangas Gaming vvice-chairman Isabelle Pariz says, “We won’t make any money at first. But first-mover is important in this market so we’re there.” Antonio Costanzo, interim CEO of BWIN France says, “We’re missing casino games, which is a shame, since they are important to overall financial stability.”
Manchester-based consultancy H2 Gambling Capital estimates that the online gambling market in France will reach 1.25 billion euros ($1.7 billion) by 2012. Française de Jeux will continue to stay the monopoly as it keeps all its gaming outlets inside its many cafés and tobacco shops. This is the only state-run group that is allowed to provide casino games such as roulette. New entries into the market will also face a stiff tax of 8.8 percent of revenues that will deeply cut into their profits. The French will review the law in 18 months by which point only the most robust companies will still be operating without losses. Talks of mergers and partnerships are already in the processes as the most competitive players get ready to keep their piece of the action.
The mergers are designed to increase revenues by tapping into ways to make the gambling more profitable. Online gaming companies are partnering up with television broadcasters and betting companies are diversifying their portfolio by extending a venture partnership with casinos. Television broadcaster TF1 and Française de Jeux have already claimed their spot while Partygaming is the industry of choice for PMU. Canal Plus, a Vivendi subsidiary, will be working with Ladbrokers and Mangas will be working with television station M6.
The average French person tends to spend a little less on gambling than some of the other EU counterparts. H2 Gambling estimates that the average gambler lost 171 euros in 2009 and this should increase up to 192 euros by 2012. Hopefully the partnership with media companies will encourage more spending towards casual gambling entertainment such as roulettes when the day is going by slow and a brightly colored machine in a tobacco shop catches the attention of an unsuspecting customer.
