After finding that France’s draft law to regulate online gaming and betting is not compliant with European law, the European Commission has given France a month to come up with a new revised version.

The key points of the draft law were the following:

• the maximum payout ratio operators are allowed to give back to players,

• the restrictions on the freedom to provide services and

• the use of sporting events’ names.

With regards to the issue of maximum payouts proposed by France, the latter plans to allow operators to pay out up to a maximum of 85% of their gross gaming win back to players, less than the industry average of 95-97%, because it claims there is a high correlation between the rate of return for winners and addiction to gambling. The commission said that it has asked the French authorities to provide evidence of this claim, but that none was offered. The Commission’s statement added: “A fixed maximum pay-back ratio could restrict the freedom to provide services under Article 49. It could prevent gaming operators established in a Member State of the EEA from taking normal business decisions or utilising efficiency advantages in order to offer higher pay-back ratios and thus become more attractive to customers.” The introduction of a maximum payout ratio for sport betting would also contradict the existing minimum payback ratio of 85% for slot machines, which is considered a much higher risk gaming activity, the statement added.

Referring to Article 49 of the European Treaty, which ensures freedom of movement for companies licensed in other European member states, the Commission said it was not calling for an “automatic granting of an authorisation in France to providers legally operating in another member state”. Having said that, any restrictions on the freedom of such a provider to provide services had to be justified by imperative requirements in the general interest, such as consumer protection and the prevention of fraud.

The draft French law also requires operators to obtain permission from rights holders to use event names when offering betting products on said competitions. The Commission said that this would not “constitute a valid justification for the restrictive policy adopted”.

Should France adopt its draft regulation without taking account of the objections made by the Commission in its detailed opinion, the latter reserves the right to take further proceedings against the country.

The Commission has given France until 8 July to propose amendments to bring the draft law in line with EC law.

French operators have been gearing up for the market opening in January 2010, with monopoly Francaise des Jeux signing up Cyber Arts, and Nyx Interactive for its poker and bingo solution.

source - www.egrmagazine.com