The total revenue from gambling in France is steadily increasing, and FDJ's acquisition of Kindred has provided a more competitive environment for players. However, the upcoming tax increases and the lack of development in online gambling are suppressing this growth. So, what is hindering the market from ultimately legalizing online casinos?
Over the years, the gambling market in France has steadily developed, evolving from casinos primarily located in coastal areas to the opening of online gambling as stipulated by the French Gambling Act of 2010.
In the first half of 2024, the French regulatory authority, Autorité Nationale des Jeux (ANJ), reported that the overall turnover of the French gambling industry grew by 3.8% year-on-year, reaching 5.5 billion euros ($5.25 billion/£4.13 billion). The total gambling revenue (GGR) from online sports betting increased by 16%, reaching 871 million euros.
During the same period, the overall online gambling market GGR grew by 11%, reaching 1.3 billion euros, with online poker's total sales slightly increasing by 2%, reaching 257 million euros. The total number of online poker players grew by 10% year-on-year, reaching 1.2 million players.
ANJ President Isabelle Falque-Pierrotin, in an interview with iGB, stated that she considers the market "very active."
"It's almost a counter-cyclical market. You know, once the overall economy declines, the market, the gambling market, is still growing," she added.
She mentioned that La Française des Jeux (recently renamed FDJ United) accounts for nearly half of the total gambling revenue in the market.
Through the acquisition of ZEturf in 2022 and Kindred in 2024, the operator has broken its lottery monopoly and begun competing with commercial operators in the online market.
Falque-Pierrotin noted: "It has injected a very important momentum into the French market and has caused reactions in other markets."
She said that FDJ's "vitality" is bringing intense competition to consumers. However, the market lacks a key element, as France is one of the very few EU countries that has not yet legalized online gambling.
Ongoing political uncertainty raises doubts about the future of igaming
Last October, due to political instability, initiatives to develop the online gambling industry were frustrated. The previous French government led by Michel Barnier had begun drafting a bill that could become online gambling legislation. However, this plan was blocked due to strong opposition from the physical casino industry (especially French casinos).
Instead, the government tried to consult with the industry to determine whether legalizing online gambling would benefit the market.
The Barnier government eventually failed due to a vote of no confidence, leading to the failure of all legislation it was drafting. Although President Emmanuel Macron appointed François Baroin as Prime Minister on December 13, the tenure of this government is still unclear.
Annabelle Richard, a legal partner at Pinsent Masons, told iGB that the ongoing political uncertainty in France has weakened the industry's hopes for legal online gambling.
"The problem is we don't know how long this government can last, so we also don't know how likely any regulatory draft can smoothly pass the review. In France, the review process can sometimes be quite lengthy," she said.
Legal barriers to gambling
French stakeholders believe that the legalization of igaming has never been so close and is very likely to be realized. However, no one is sure about the specific timing. Sources say that due to political instability, legalization could happen this summer or early 2026.
The view of ANJ is that any igaming legislation should have strict regulations before it is passed. "The regulatory authority is not responsible for deciding whether [igaming] must be opened. But what we are saying is that if [opportunities] are to be reopened, they should be reopened under very strict conditions, which are related to the marketing of such products and the conditions related to [operators]," Falque-Pierrotin said.
Richard from Pinsent Masons pointed out that in recent years, physical casino operators have successfully lobbied against opening the online casino market. They argue that legalizing online casinos would pose risks to local businesses and employment, and warn that legalizing online casinos could lead to the closure of one-third of French casinos.
"They also indicate that this reform could threaten 15,000 jobs in the first year and reduce the activity of the remaining casinos by 25%," Richard said.
"However, their position seems increasingly difficult to defend, and in recent months, we have seen several drafts of regulations on the legalization of online casinos. The black market is huge and needs additional tax revenue, which could lead the French government to allow online gambling in the coming months."
Pressure from the illegal market in France
Like many European countries, France is also dealing with a booming illegal online gambling market.
A report released by PwC in November 2023 pointed out that 510 websites offer illegal gambling to French consumers. Among the websites found in the study, 65% offer online casino games.
PwC's research indicated: "Consumers of illegal online gambling in France mainly obtain this service through direct internet searches, indicating that they are well aware of the main illegal gambling websites existing in the French market."
At that time, ANJ commissioned PwC to write the report, estimating that the total gambling revenue of this illegal market was between 748 million euros and 1.5 billion euros.
However, its size has sparked debate between operators and regulatory authorities, with operators calling for more action.
ANJ intensifies its crackdown on the black market
ANJ stated that in recent years, its ability to combat the illegal market has been enhanced due to the introduction of new tools, including the ability to quickly block IP addresses.
"I want to say that within two years, we have achieved considerable success because the number of website addresses we block is almost as many as we request the judge [to block illegal websites]. Previously, this was a judicial process, although effective, but very time-consuming—now it's much faster," Falque-Pierrotin said.
The regulatory authority pointed out that illegal operators can mirror their websites and pop up with slightly different addresses. However, Falque-Pierrotin believes that its intensified actions are sending a signal to illegal operators, indicating that it is ready to combat them.
"We have also established quite effective relationships with technical intermediaries, search engines, and social networks. We have a dedicated hotline to report illegal content to them," she added.
Although the regulatory authority estimates that the illegal market accounts for about 10% of the French market, operators argue that this figure is far beyond that and requires stronger action.
Last year, the French Online Gambling Industry Association (l'Association Française des Jeux En Ligne) warned that the problem of illegal gambling had reached a critical point, with the total number of illegal players reaching 4 million by 2023, exceeding the 3.6 million people in the regulated industry.
Illegal online gambling market erodes physical casinos
The industry believes that more can be done in terms of law enforcement. Laurent Lassiaz, CEO of JOA Casino and Vice President of Casinos de France, told iGB: "I hope the government will be more active in combating illegal gambling, as this is currently the number one issue facing any country in Europe."
The head of JOA claimed that considering the considerable size of the illegal market, operators have already seen igaming being eroded by the illegal market.
"There is already a very, very large illegal market, and these websites are easy to access. I firmly believe that we are already facing the impact of erosion," Lassiaz said. "Because we know that our customers are already playing games on some illegal websites, and for most of them, they don't even know it's illegal."
Illegal websites
Richard pointed out that when clients ask her to investigate illegal websites on their behalf, she finds that these websites can request more data than official websites, and their KYC requirements are much more lenient than those of licensed operators.
"Of course, depositing money is quite easy, but withdrawing it is simply impossible. I mean, you know, there are various official authentication tools," Richard said.
"But strangely, these tools never work, while you scan your ID card, take a video of yourself, and send all these to a website whose location and operator you don't know," Richard said. "Even if you win, it brings a lot of problems for people with gambling addictions. Even if they want to stop, they can never withdraw their balance, which is another reason why they keep returning to the site."
Sorare Law
It is worth noting that France has taken a step towards online gambling in recent years, or more precisely, diversified the previously betting-only mode. In 2023, it passed the "Digital Space Regulation Law," commonly known as the Sorare Law or JONUM framework.
The introduction of this law was to accommodate the popular fantasy sports cryptocurrency trading card operator Sorare. Its game allows players to win NFT-based items that may be redeemable for cash.
Sorare's working principle is to issue virtual player cards as NFTs, which can be purchased on the Ethereum platform and used to create fantasy teams.
The value of the cards increases or decreases based on the player's performance in real football matches. These cards can be traded on Sorare's digital marketplace/exchange.
Since the real performance of players affects the value of the cards won, Sorare's actions have attracted the attention of ANJ.
Building a "free" casino
Therefore, ANJ has asked Sorare to provide consumers with enhanced access to existing free game modes and to provide them with equal winning opportunities, whether they pay to play the game or not. Sorare's modified mode allows French players to participate in its tournaments without purchasing NFT/blockchain cards.
The operator has achieved great success globally, and its free game service once allowed it to evade British gambling regulations. However, last year, the UK Gambling Commission filed a legal lawsuit against the company for providing unlicensed gambling services in the UK.
Richard pointed out that this French law has raised questions about the future of online gambling and the models that can bypass the ban on online casino games.
Richard told iGB: "Many operators are considering deploying slot machine-like mechanisms in online games and adopting an appropriate appearance to make them comply with regulatory requirements."
"What you win is not cash, but redeemable tokens. One of the main restrictions is that the operator that allows you to win digital items cannot be the operator that allows you to exchange tokens for cash. But you can imagine that there are already large platforms that can exchange these digital tokens and convert them into cash."
Increased taxes put pressure on operators
In addition to the potential of legal online gambling in the market, French operators are also preparing to pay higher taxes for all other online vertical industries this year. These public taxes have been included in the "2025 Social Security Financing Act" and are related to the increased social security contributions applicable from July 1, 2025.
The tax rate for gambling in France is based on total gambling revenue, and the tax rates vary between industries. Operators subsequently need to pay separate social security contributions, and this fee will increase across all industries.
As part of the social security payments, online sports betting contributions will increase from 10.6% to 15%, while live sports betting contributions will increase from 6.6% to 7.6%.
Richard pointed out that for the fiscal year ending on or after July 1, 2025, a new annual contribution for advertising investment is also required. This will be equivalent to a 15% contribution to gambling advertising expenses (including publishing costs and purchasing advertising space).
"The new clause L137-27 of the Social Security Law was modified during the parliamentary procedure. The tax rate is set at 15%, and the financial bonuses given to players are not considered advertising expenses, so they are not included in the tax base," Richard said.
FDJ and Banijay complain about increased taxes
FDJ Chief Financial Officer Pascal Chaffard told investors during the full-year earnings call on March 6 that the impact of the new tax law led to a tax revenue payment of 45 million euros in 2024.
The increase in contributions will affect its overall group revenue in 2025, with the group's target being 3.8 billion euros, with a recurring EBITDA profit margin of over 24%. FDJ also noted that the increase in French tax rates could lead to a tax payment of 100 million euros by 2027.
François Riahi, CEO of Banijay Group, which owns Betclic Everest Group, told analysts in the full-year performance report that the increase in taxes in France is "anti-competitive." The group plans to fight against the authorities. In the performance report released on March 6, the group estimated that the performance in 2025 would be affected by an increase in taxes of 20 million euros.
"We do pay high taxes in the French market," Lassiaz told iGB.
"Part of it goes to the (national) government, but a considerable part also goes to local governments, municipal authorities, and regional governments. Suddenly, you know, the higher levels of government realize that thanks to the casino industry, they can provide funding for many things locally."
If operators raise prices to absorb the tax increase, these tax increases may eventually push players towards the black market. It is not yet clear whether the new French government intends to revisit the country's online gambling legislation.
However, considering budget concerns, the potential new tax base that the industry may represent could prompt stakeholders to push for its reintroduction on the agenda this year.
