Posts Tagged ‘illegal gambling’

Why the French shunned sports betting

According to the French authority of online gaming, bingo and online casinos have generated unprecedented interest in France in 2011. But sport betting escaped that frenzy.

The figures recently released by the authority of online games (Arjel) are final. If the French spend more money in online gaming, they shun sports betting despite the opening of this market to competition in June 2010. Every day in 2011, the French have wagered a record $ 86.5 million euros in different gambling legally available to them (lottery, casino, online betting…). In ten years this amount has doubled. However, the success announced was not at the rendez vous for sports betting. The bubble was quickly deflated. In the fourth quarter of 2011, the volume of sports betting collapsed by 20%. Online poker and horse race betting are the only segments on the Internet to continue to grow.

Three reasons explain the lack of enthusiasm of the French online gaming. It is primarily a cultural reason. There was no real culture in France of sports betting in contrast to Britain and Italy according to Arjel. Especially, French operators of sports betting have long neglected their offers. Sports betting requires explaining, an accompaniment with informative content, but the partnership agreements between sports betting operators and the sports media have not been sufficiently exploited. So that instead of supporting their offers with online information updated constantly, many operators were just happy to organize some betting.

In addition live sports betting was not well promoted. Instead, they devoted their investment to marketing and advertising. While the law allowed it, few operators have developed live betting: the challenge of betting during a live sporting event. This discipline only represented 50% of total bets in 2011 against more than 85% in Great Britain. But live betting is undoubtedly one of the essential tools for running a betting site and gaining important traffic.

Last but not least, the economic and fiscal model is not that suitable for sports betting. Operators had reported that problem in June 2010 to the government and the legislature, mentioning the risk of transfer to illegal sites. The numbers give them reason today. The rate of return to players is now just 82% which is well below that of Italy for example. The reason? The level of taxation.

Even Arjel themselves recommends in its latest report a change of assessment and tax rates. The regulator is concerned that because of the lack of appeal of online gaming sites promotes some players may prefer to play at to illegal sites that the law sought to avoid. To date no online gaming operator is profitable. Some had even to close the shop like EurosportBet (TF1). The government need to soon decide on a change in taxation at the risk of re-emergence a parallel illegal activity.