French Government Rejects Shared Liquidity Proposals

Proposals to end the ring-fenced online poker market in France and share liquidity with other European jurisdictions have been rejected by politicians.

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FranceProposals to end the ring-fenced online poker market in France and share liquidity with other European jurisdictions have been rejected by politicians.

For five years, the online poker market in France has been suffocated by a law that ring-fences French online poker players and prevents them from competing on international sites. The situation has not been helped by excessive levels of taxation – both on gross gaming revenues and on every hand that is played in cash games.

The consequence of the law is that many French players have deserted the regulated sites to compete on offshore sites. On offshore sites they can find a higher level of liquidity, lower levels of rake and more generous player rewards. Their departure from the market has exacerbated the decline of the French online poker market – the cash games tables seeing 14% less action last year than in 2014.

Hope for a Solution in Digital Law

Last September the French government published proposals for a new digital law. An amendment was included in the proposals that would change the existing online gambling laws so that French poker players would be able to compete against players from other countries that had a similar level of regulatory protection.

Hopes were high that the amendment would be presented to the National Assembly after Emmanuel Macron – France´s Minister for the Economy, Industry and Digital Affairs – told reporters that the ministry was working with the French online gambling regulatory body – ARJEL – to include the amendment in the draft proposals.

However, ministers voted overwhelmingly to reject the amendment – the second time they have rejected the opportunity to open up the French market. In 2013 a similar proposal was dismissed after French ministers decided that the decline of online poker was a global phenomenon, and any action they took would be of no help to the domestic market.

What Now for Online Poker in France?

The decision to remove the online poker amendment from the digital law eliminates any hope that the French online poker market will allowed to join markets in the United Kingdom, Spain or Italy to revive its flagging fortunes. It is unlikely that there will be another opportunity for shared liquidity to be considered for a number of years and that the French online poker market will continue to decline.

Since 2011, half the online poker sites that applied for licenses have now left the market. Of the ten that remain, it has been estimated that only PokerStars and Winamax are making any money (mostly through online poker tournaments and Spin & Go lottery games), and that the number of online poker operators in France will contract further within the next few years.

The likelihood is that more players will leave the regulated market to play at offshore sites. In February 2014, a study by France’s Observatory of Games (ODJ) and the Monitoring Centre for Drugs and Drug Addiction (ODFT) found that 47% of French poker players had accounts with offshore poker sites and that half of them used the offshore companies exclusively.

With the action on the cash game tables declining by 14% last year, it would be safe to assume that the number of players playing poker at offshore sites has increased dramatically since the 2014 study. It would also be safe to assume the number will increase further following the latest kick in the teeth for the regulated online poker market in France.