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France’s Proposed Online Casino Legalization Sparks Controversy and Delays

Plans-to-legalise-online-casinos-in-France-met-with-opposition-Postpones-budget-amendment-on-iCasino-lawsThe French government’s initiative to legalize online casinos has encountered significant pushback from various stakeholders, causing officials to halt their proposed amendment to the 2025 budget. This amendment, originally submitted by Prime Minister Michel Barnier’s administration, aimed to bring France’s gambling laws in line with other European Union (EU) countries. However, the intense opposition from addiction experts and land-based casino representatives led Budget Minister Laurent Saint-Martin to announce a postponement on Sunday, signaling the need for further consultations to address concerns.

Economic and Health Arguments for Legalization

Proponents of online casino legalization argue that the current prohibition places France at odds with EU standards, as it remains one of only two EU countries, alongside Cyprus, to ban online casino gambling. Despite this, France already allows online betting and poker, with poker being categorized as a skill-based game and thus exempt from the ban on games of chance.

Advocates of the proposed legislation believe that regulating online casinos would enable the government to generate substantial tax revenue and better manage public health risks by overseeing the sector. Government estimates suggest that legalizing online casinos could yield up to €1 billion in taxes annually, with a projected gross gaming revenue (GGR) tax of 55.6%, aligning with the rate applied to online lottery games.

The illegal online casino market in France is reportedly thriving, with the government estimating annual revenues from unregulated operations reaching as much as €1.5 billion. By bringing these activities into a legal framework, officials argue, they could address health concerns more effectively. The government stated that regulated online casinos could “limit the impact of online games on the health of consumers” and reduce the appeal of unlicensed operators.

Strong Opposition from Addiction Specialists and Casino Industry

Despite these proposed benefits, the plan has faced substantial resistance from those concerned about public health and the livelihood of France’s physical casinos. Féderation Addiction, a coalition of addiction specialists, warned against the amendment, labeling it “irresponsible and contrary to public health priorities.” Citing statistics from 2019, the organization highlighted that 1.4 million people in France were already at risk of excessive gambling, with nearly 400,000 dealing with severe gambling addiction. They cautioned that legalizing online casinos could exacerbate these issues, with more individuals potentially developing problematic gambling behaviors.

France’s land-based casino industry also voiced strong concerns, citing potential economic damage. The president of Casinos de France, Grégory Rabuel, expressed alarm over the projected consequences for physical casino venues. In a statement, Rabuel noted that “opening up online casinos will lead to a fall in gross gaming revenue for land-based casinos of between 20% and 30%.” He also warned that up to 30% of establishments could face closure, threatening around 15,000 jobs. This sentiment was echoed by over 130 French mayors in an editorial published in Le Figaro, where they argued that legalizing online casinos would ultimately harm the industry rather than boost the state’s finances, describing the proposal as “opening a Pandora’s box.”

Postponement and Future Considerations

In response to these concerns, Minister Saint-Martin confirmed that the amendment to legalize online casinos would be removed from the 2025 budget proposal, stating, “We need to work among ourselves first.” He emphasized the government’s commitment to considering all parties involved, especially land-based casinos. This delay maintains the current regulatory framework established in 2010, which allows for sports betting, horseracing, and poker but excludes online casinos.

However, the government has not entirely abandoned the idea. Saint-Martin indicated that future discussions may revisit online casino legalization, with potential legislative measures addressing tax generation, protections for physical casinos, and public health safeguards. Casino representatives, for their part, remain cautious but are prepared to engage in constructive discussions. Rabuel expressed relief over the postponement and emphasized the importance of a collaborative approach: “We remain vigilant to ensure that any future legislative or regulatory changes take place within a framework of consultation and constructive dialogue.”

As the debate continues, the French government’s approach will likely focus on balancing economic incentives with the need to protect public health and safeguard the interests of the country’s established casino sector. The final decision, expected after thorough consultations, will determine whether France joins the majority of EU countries in permitting online casinos or continues to uphold one of the EU’s most restrictive gambling regulations.

Sources:

“Plans to legalise online casinos in France met with opposition“, rfi.fr, October 23, 2024.

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Genting NY Casino Bid Could Be Hindered by Las Vegas Controversy, Says CIMB

Genting Bhd’s effort to procure one of the three downstate casino licenses in New York could be damaged by potential regulatory discipline the operator faces in Nevada, according to CIMB Securities.

Selwyn Balkissoon
Resorts World New York in Queens. Operator Genting’s hopes of converting the venue to a traditional casino could be harmed by Las Vegas controversies, says a research firm. (Image: NYT)

Last week, the Nevada Gaming Control Board (NGCB) said it is examining financial penalties against Resorts World Las Vegas (RWLV) — Genting’s lone Nevada property — over that venue’s role in allowing known illegal bookmakers to wager there. Nevada regulators alleged that Resorts World Las Vegas not only knowingly allowed those bookies to bet there, but also didn’t scrutinize the source of their cash. That could call into question the veracity of the integrated resort’s anti-money laundering protocols.

We think another risk is that a negative review by the commission could jeopardize Resorts World New York City’s bid,” wrote CIMB analysts in a recent report to clients.

Genting-owned Resorts World New York is a slots-only venue in Queens. The venue has been operational for about 13 years and over that time, it’s delivered more than $4 billion in taxes for the state. That couple with its status as one of the highest-grossing regional casinos in the country despite having no table games has led to speculation that Resorts World New York is almost a lock to win one of three downstate permits.

Genting Could Face Hefty Fine in Nevada

CIMB Securities observed that Resorts World Las Vegas could have to answer for as many as 300 separate violations, which could result in fines totaling $75 million.

It’s also possible that if Nevada regulators want to take a hard line against Genting, RWLV’s non-restricted gaming license could be suspended or even revoked, though the research firm acknowledges that both a fine of that size and revocation of the gaming permit would be unusually harsh punishments.

“Some industry experts say that this is rare and the commission is unlikely to go that far, due to the uncertain long-term impact from taking such a drastic measure,” noted the brokerage firm.

Scott Sibella, the former MGM Resorts International and RWLV executive at the heart of the scandal, pleaded guilty in January to violating the federal Bank Secrecy Act and in May was tagged with $9,500 fine and a $100 special levy. In Nevada, he could face loss of his gaming license and up to $750,000 in fines.

Genting NY Casino Bid Could Withstand Controversy

To date, no New York regulators have commented on whether or not the goings on at Resorts World Las Vegas could endanger Genting’s Empire State ambitions. In New York, the current emphasis is on finding some way to expedite the start of the bidding process for the three downstate casino licenses — something that appears unlikely over the near-term.

About a year ago, rumors surfaced that MGM’s Empire City Casino could also be hampered in its efforts to land one of those permits because of Sibella’s ties to that operator. He served as president of MGM Grand on the Las Vegas Strip for a decade.

However, that’s just speculation and no New York regulator has publicly said the Genting and MGM bids there are in jeopardy due to controversies in Nevada. With both operators already established and known to New York policymakers and with both pledging billions of dollars enhancements to their existing venues and the creation of thousands of new jobs should they win traditional casino licenses, it’s possible their New York ambitions can withstand the Sibella-related imbroglio in Las Vegas.

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