Gambling games in France

Lotteries

In 1933 the French parliament authorised the establishment of a national lottery. Initially the profits were allocated to accredited public causes such as the war veterans’ retirement fund and assistance for victims of agricultural disasters. In 1979, the French Government took control of the lottery by establishing a semi-public enterprise called the

Societe de la Loterie Nationale et du Loto National, which was renamed France Loto in 1989 and then La Française des Jeux in 1991. Today the French Government holds a 72% stake in La Française des Jeux with the remainder of the capital being shared between lottery retailers, agents and company employees. The Ministry of Finance regulates the company. La Française des Jeux has a network of over 42,000 retailers. Fifty-seven per cent of the network, which mainly consists of tobacconists, newsagents and bars, only carry scratch cards. (Source: GBGC Report)

The National Lottery in France is subject to 19,6% VAT charge. La Française des Jeux also contributes to various social causes, such as CSG, RDS and FND. The lottery’s prize payout must be between 50% and 70%. Progressive levy tax is taken on the total lottery revenue. The number of full-time employees in the French National Lottery has been steadily rising over the past five years, from 778 in 2000 to 895 in 2004

However, one must also take into account indirect employment in the gambling services distribution network. According to the submission to the Enquiry from

La Française des Jeux In full-time equivalent, this employment accounts for approximately 23,000 people.

The multi Member State lotto game EuroMillions was launched in 2004 in conjunction with

La Française des Jeux, the UK National Lottery, and Loterias y Apuestas del Estado of Spain.

In addition, six more nations – Ireland, Switzerland, Belgium, Austria, Portugal and Luxembourg – were scheduled to join EuroMillions by March 2005. Because of network effects, the larger player pool will mean larger potential jackpots, which should enhance the popularity of EuroMillions.

A dozen instant games were available to registered players on

La Française des Jeux’s web site by 2003 as sales grew to €5.44m, 0.07% of total sales. This represented two more games than were available during the previous year when La Francaise de Jeux’s Internet site generated sales of €3.09m or 0.04% of total sales. During April 2004 La Française des Jeux launched their core (6/49) Loto and € millionillions on their website.

Lotteries are not permitted to offer VLT games (video lottery terminals) under the current law.

Casino Gaming

According to French Law, gaming activity is strictly prohibited and can result in prosecution under the terms set out in Article 410 of the old Penal Code. The Act of 15 June 1907 created an exception to this prohibition, allowing casinos to be opened in seaside and health resorts and thermal spa communities.

The Act 88-13 of 15 January 1988 extends this authorisation to include major city areas with a population of more than 500,000, and having specific tourist and cultural activities.

The Ministry of the Interior’s Racing and Gaming department regulates casinos and ensures compliance. A national Gaming Board – made up of senior civil servants (14) and Members of Parliament (5) – is responsible for examining gaming license applications and renewals.

An Order issued by the Ministry of the Interior fixes the period of concession, the authorised games, and the operating conditions for the casino. A license may be cancelled by the Ministry of the Interior in the event of failure to comply with specifications or provisions of the Order.

The French casino market once consisted of many small privately-owned casino properties.

However, in recent years, there has been a gradual but significant consolidation of the market, with ownership being concentrated among a handful of publicly-owned companies.

By 2002, the leading eight companies accounted for 87.0% of the French casino market’s GGRs, with the leading three accounting for just under 60%.

(Source: GCGB Report) Casinos were permitted table games only until 1987, when the law was passed authorizing casinos to offer slot machines as well.

Casinos in France are taxed at the national and the local level. At the national level casinos are subject to five types of taxes:

A direct gaming tax of 0.5% of GGR for traditional table games and 2.0% of GGR for gaming machines;
A progressive gaming tax for which the basis is 75% of GGR subject to the brackets given in the table below:
A 3%

CRDS (Contribution to the Repayment of Social Debt) tax based on GGR was introduced during 1996;

In 1998, the CSG (General Social Contribution) was increased to 7.5% and is now calculated on a reduced basis of 68% of slot machines’ GGRs;
A tax stamp on entrance fees for table games of €10 is paid to the National Government.

The number of casino employees was 13,000 in 1999, which had increased to 17 500 in 2004, and approximately 10% of them are part-time.

Machine Gambling Outside Casinos

Gaming machines are not legally available outside of casinos in France though there are thought to be a number of illegal devices in operation.

Betting

Pari-Mutuel-Urbain

(PMU) is a group that represents the interests of 73 member horseracing associations. In France, only one association for each type of specialist horseracing betting is permitted: France Galop for gallop races and Cheval Français for trotting races (Decree of 5 May 1997). The Ministry of Agriculture and the Treasury both regulate PMU’s operation, which is a form of consortium between the “sociétés de courses”.

During 2005, 13% of the nation’s adult population placed a bet with the PMU. At present, there are about 255 racecourses with 17465 horse races run in France during 2005 in France. The PMU offered pari mutuel betting on 6497 of these as well as over 95 foreign races, 99% of which are Group 1. Approximately 6.5 million French customers bet off-course with the PMU during 2005, generating a handle of €8.0103 billion. This represents an increase of 6% on the 2004 level.

Approximately 1.7 billion bets were placed with an average stake of €5.4, generating gross profits (GGRs) of €2.1869 billion. This includes only off course betting; on-course pari mutuel betting totalled an additional €196.8m during 2005. The recent trend has been downward for French on-course betting.

During 2005 there were a total of 6,497 races on PMU cards including 95 that were staged outside of France. The total handle generated off track by the PMU increased by 6% over 2004 to €8.0103 billion, an average of €1.23m per race, with the average stake per bet being €11. The Quinté+ was the most popular bet during 2005 accounting for €2.0859 billion of the handle.

Under the Decree No. 2003-351 of 14 April 2003, the Horseracing Companies are subject to VAT, the current rate of which is 19.6%.

French pari mutuel betting is taxed at 13.83% of turnover and between 8.5% and 16.6% of the stakes is returned to racing. The various betting companies substantially support the horseracing industry by means of levies on parimutuel bets after deduction of their management expenses. Incentives to improve the breed are an important part of industry stimulation (i.e. contributions to race prizes and bonuses to breeders and owners). In addition, the state receives a number of levies as well. The average cumulative rate of all levies on parimutuel bets cannot exceed 32% of the overall amount of sums wagered, under Article 53 of the Finance Law for 1996.

After covering all management costs, the remaining balance of available resources is fully allotted by the Horseracing Companies, in accordance with their company objects, to paying out incentives. These incentives benefit those partners who contribute to the success of a horse: the breeder, the owner, the trainer, and the jockey.

PMU launched its iTV service, Equidia, on Canal+ Technologies during April 2000. The specialist horseracing channel is available to nearly all 12.3 million Canal Satellite, TPS and other cable operators’ customers, and it extended to offering WAP information services. In 2005 approximately 273,000 of PMU’s 6.5 million customers placed bets either over the internet, telephone, Minitel, or via Equidia, the interactive television channel. During 2005 there were over 3,000 hours of live broadcasts on Equidia and its sister channel Equidia Pro.

Together these two channels broadcast in 40 countries on three continents and in three languages.

PMU started to accept bets on its Internet site for French residents during July 2001. In 2005 the site had an average of 17 million unique visitors per month and 72 million pages were read.

Charity Gambling

Under the terms of the 1891 Horseracing Act, only specifically created not-for-profit horseracing companies approved by the Ministry of Agriculture are allowed to organise horse races and to be licensed to take bets.

In additional to the national lottery some charitable lotteries are also permitted.