Buckle Up, French Gambling Sector! Brace for Steep Tax Hikes
France Imposes Higher Taxes on Gambling Businesses
France's government is gunning for a massive chunk of the gambling industry's revenue, as they've approved a series of tax hikes across various sectors.
Here's the lowdown:
- Lottery GGR: Now taxed at 10%, up from the previous rate of 0%.
- Retail Sports Bets: The tax rate has been jacked up to 10%, a 3% increase from 7%.
- Online Bets: The tax rate has soared to 15%, a jump by 4.5% from 10.5%.
Previous attempts to push through these tax increases were met with skepticism and even threats of industrial action by lawmakers. However, the tax hikes finally sailed through France's upper chamber last week.
The Tax Hike Showdown
The country's prime minister, Michael Barnier, aims to extract €500m ($524m) from French gambling operators as part of a broader strategy to plug the budget gap with sin taxes. However, one sector that will escape the taxman's wrath for now is horse racing, thanks to a recent, unprecedented strike organized in protest against additional taxes.
Industry Insiders Chime In
Industry experts, like Nicolas Béraud, the CEO of Betclic and the president of AFJEL (iGaming trade body), have bashed the government for overlooked issues plaguing the industry. Béraud warns that the new taxes would brutally squeeze the margins of many operators and might push some towards the red.
Meanwhile, Jean-François Vilotte, former AFJEL president and current head of the French Football Federation, agreed that many sports leagues might suffer due to a decrease in funding from gambling operations. Vilotte also highlighted concerns over bodies responsible for maintaining sports integrity, which could feel the pinch due to funding shortfalls.
FDJ under Scrutiny
This tax hike comes at a crucial time for FDJ (Française de Jeux), the firm that holds the exclusive right to operate the lottery in France, as well as scratchcards and instant games. FDJ enjoys significant margins on its products, with scratchcards returning players around 70%. With revenues jumping up to €1.4bn ($1.5bn) in the recent fiscal year, FDJ finds itself squarely in the crosshairs of France's tax collectors.
Despite the seemingly attractive revenue numbers, the question of FDJ’s survivability in a more open market, fraught with increased taxes and international competition, remains unanswered.
Stay tuned as the gambling industry braces itself for rough waters ahead! 🌊💣✨
Sports bet operators in France are now subject to a higher tax rate of 10%, an increase of 3% from the previous rate of 7%.
Industry experts have expressed concerns that the new tax hike might brutally squeeze the margins of sports bet operators, potentially pushing some towards financial loss.
