Illegal gambling in France surpasses regulated market
Earlier this week the French online gaming association, L’Association Fran?aise du Jeu En Ligne (AFJEL), issued a warning about the rise of illegal gambling in France. The association revealed that the betting handle for Euro 2024 from its members fell significantly below pre-tournament estimates, indicating a surge in illegal gambling activities.
The issue of illegal gambling has reached a critical point, with the number of illegal players in 2023 surpassing the regulated sector’s 3.6 million, totalling four million. This development is alarming, especially considering that the French gambling regulator, L’Autorite Nationale des Jeux (ANJ), had predicted that €1 billion would be wagered on the tournament. However, AFJEL reported that only half of this figure was staked.
“Despite the actions taken by the regulator, the blocking of illegal sites is still not working.” NICOLAS BERAUD
The betting volumes remained stagnant compared to the last European Championship in 2021. After that tournament, where France was eliminated in the second round, online punters wagered €343 million. This figure would increase to around €500 million when La Francaise des Jeux’s retail network was included. The amounts staked were also down 25 percent from the 2022 World Cup, when €900 million was bet as France reached the final.
Ineffectiveness of blocking illegal betting sites
The disappointing figures come after the illegal market outperformed the licensed market for the first time since the latter was established in 2010. A PwC report published in December 2023 estimated that illegal gambling accounted for around 10 percent of the total French market. The absence of a regulated online casino and high taxes are often cited as challenges holding back the legal market.
AFJEL pointed out that the Euro 2024 figures follow a trend where there was no growth within the licensed market in 2022 and 2023. There has also been a 5.3 percent decline in unique players. This development, contrary to European trends and the digitalisation of the sector, confirms the massive diversion of players from the legal offer to the illegal market, the impact and danger of which cannot be precisely assessed at this stage.
Nicolas Béraud, the president of AFJEL, (photo above), expressed his concern over the figures, stating that they contradict the supposed frenzy of online sports betting announced on the legal market. He contended that the competition was a success for its members and the wider community from a player protection point of view, with members operating within ANJ guidelines and respecting their commitments.
However, he warned that unlicensed operators are acting with complete impunity, and the blocking of illegal sites is failing to stem the illegal market’s growth. Béraud said, “If Euro 2024 shows surprisingly low results for licensed operators, the illegal market is now continuing its very strong expansion by cannibalising the online sports betting sector by diverting players from the legal offer.”
ANJ figures suggest a thriving french market
Despite AFJEL’s concerns, ANJ figures suggest the French gambling market is thriving, hitting a record gross gambling revenue (GGR) of €13.4 billion (￡11.6 billion/$14.3 billion) in 2023. France’s gambling turnover for 2023 was a 3.5 percent increase on 2022’s figures, with the ANJ noting that all market segments in the country saw GGR increase for the first time since 2019. However, the ANJ also acknowledged the market is growing slower than the European average of 5.5 percent.
Online sports betting revenue grew 6.4 percent year-on-year, reaching €1.5 billion despite the lack of a major sporting event. Sports betting made up 63.3 of online GGR, with poker and horse racing accounting for 21.6 percent and 15.1 percent respectively. Despite the rise in online GGR, the pool of unique players dropped by 7.3 percent, while the number of active accounts also fell by 3.9 percent.
The market continues to be dominated by the country’s former gambling monopolies. Lottery and retail betting giant La Fran?aise des Jeux (FDJ) and horse race betting specialist Pari-Mutuel Urbain (PMU) both saw growth in 2023, accounting for 62.7 percent of France’s total revenue. FDJ’s 2023 growth was driven by point-of-sale sports betting and competing activities, which rose 10.4 percent in GGR on 2022. Those activities accounted for 16.2 percent of FDJ’s group GGR for the year and €1.1 billion in gross profit. PMU also saw its betting activity grow, although those increases slowed compared to years prior, with GGR at €1.7 billion, just a 1 percent rise on 2022.
This paradoxical situation presents a complex challenge for the French gambling industry. While the legal market appears to be thriving on the surface, the underlying issue of illegal gambling continues to grow, posing a significant threat to the industry’s future. The need for effective measures to curb illegal gambling and ensure the growth and sustainability of the legal market has never been more critical.
Addressing issues of illegal gambling in France
The French authorities could enhance their regulatory measures to curb illegal gambling. This enhancement could involve imposing stricter penalties for illegal operators and individuals who participate in illegal gambling activities. This approach would serve as a deterrent and could significantly reduce the prevalence of illegal gambling.
The current measures to block illegal gambling sites seem to be ineffective. Therefore, there is a need to invest in advanced technologies and collaborate with internet service providers. This collaboration could lead to improved detection and blocking of these sites, thereby making it more difficult for players to access illegal gambling platforms.
One of the factors driving players to illegal sites is the lack of a regulated online casino. Legalizing more forms of online gambling could help to attract these players back to the legal market. This move would not only provide more options for players but also increase the revenue for the legal market.
High taxes are often cited as a challenge for the legal market. A review of the current tax policies could make the legal market more attractive to both operators and players. Lower taxes could result in more operators entering the market and more players choosing to gamble legally.
Ensuring that legal operators offer robust player protection measures could help to build trust among players and discourage them from turning to illegal sites. These measures could include setting betting limits, offering self-exclusion options, and providing resources for problem gamblers.
The government and legal operators could collaborate on public awareness campaigns. These campaigns could educate the public about the dangers of illegal gambling and the benefits of using legal channels. Increased awareness could lead to a decrease in the number of players choosing to gamble illegally.
Collaborating with international regulatory bodies could help to share best practices and improve the effectiveness of regulatory measures. This collaboration could lead to the implementation of more effective strategies and policies.
These strategies, if implemented effectively, could help to curb the growth of the illegal gambling market in France and ensure the sustainability of the legal market.
