The European Gaming and Betting Association (EGBA) welcomes the European Commission’s detailed opinion against the French proposal for online gaming and betting.

The draft legislation is supposed to regulate the online gaming and betting market in France, but is under increasing criticism for only serving to protect the French monopolies Française Des Jeux and PMU.

Maarten Haijer, EGBA Director for Regulatory Affairs said: “Today’s action by the Commission underlines that online gaming and betting is a cross border economic activity where EC legal requirements prevail. It makes no sense to create a local Internet market in France. We welcome the Commission’s action and are confident that France will reconsider its proposal to avoid litigation”.

The French draft law was notified to the European Commission and the other Member States on 5 March. At the time EGBA already flagged a number of key provisions that are highly questionable under EC law. These include:

• Limiting the opening of the gaming market to the online segment only
• Limiting the opening of horse betting to pool betting only - justified by the government because it is ´French tradition´;

• Limiting the average pay back ratio (percentage of stakes paid back to players) to the same level of those currently applied by historical operators. There is no evidence or known impact of such a measure on the protection of consumers;

• The proposed license system fails to take into account securities and controls already offered by other EU jurisdictions, in conflict with well known jurisprudence of the European Court of Justice;

• The creation of a ´sports betting right´ in favor of sports federations which hardly can be called a credible means to prevent match fixing, especially when operators already have developed early warning systems to prevent those risks.

This is the third detailed opinion from the Commission against recent draft legislation aimed at creating a local internet market in France. The first was issued July 2007 against a draft decree obliging Internet Service Providers to discourage consumers from accessing non French licensed operators (see here).

The second was issued in March 2008 against the draft decree on payment blocking (see here). Both decrees have not been adopted since. “It is clear that the French proposals fail to set the standard for legislating the sector” added Maarten Haijer.

Today’s detailed opinion extends the standstill period until 8 July 2009, during which time France cannot adopt its draft legislation. If France subsequently decides to adopt this text without taking into account the Commission’s objections, the Commission can immediately launch infringement proceedings.