France on the brink as government faces no confidence vote
Crunch time for Barnier government, ANJ forces Polymarket to block FR players, Italy tax revenues drop
Good morning, on Gaming & Co today:
Uncertainty surrounds iCasino and taxes in France as Barnier government teeters on the brink.
ANJ forces Polymarket to block French players.
Italy tax revenue drops as black market profits rise.
Intralot suffers bad Q3, Veikkaus launches live casino.
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France on the brink as government faces no confidence vote
Gambling industry faces uncertain future with tax rises and iGaming regulation in the balance
Crunch time: Michel Barnier’s government could be the shortest-lived in France’s history as he faces a vote of no confidence that he is expected to lose this afternoon. The vote follows French MPs’ rejection of the 2025 Budget Barnier submitted on Monday.
Barnier pushed through his budget at the start of the week by using article 49.3 of the Constitution, but use of the ‘49.3’, as the French call it, also enables MPs to put forward a motion of censure in the government.
Both the hard left party La France Insoumise (LFI) and Marine Le Pen’s far right Rassemblement National (RN) have long called for a no confidence motion. LFI’s proposal is likely to be voted through with support from the RN and most of the Socialist Party.
France’s debt is nearly 6% of GDP, double the 3% allowed to EU Member States. Barnier’s budget sought to save €60bn through a mixture of tax rises on corporations and goods, and cuts to social services.
iCasino doubts and tax rises
For the online gambling sector, the main concerns revolve around the increased tax hike set to hit online sportsbooks from next April and the government’s working groups to study online casino regulations – the first of which took place yesterday and focused on addiction.
Both face uncertain futures if the government falls and with online casino regulation now highly visible in the public sphere, keeping exchanges calm on what remains a sensitive subject will not be easy.
Rudderless: Should Barnier’s government fall, a new budget, as well as the social security budget, which incorporates the planned tax rises on groups like Unibet and Winamax, cannot be voted on until there is a new government. Should that be the case, the 2024 Budget will be adopted by a special legal mechanism.
France can not hold another set of parliamentary elections until July 2025 at the earliest following President Macron’s decision to call snap elections this summer. He will have to appoint a new cabinet should Barnier lose the confidence vote today.
In an op-ed for Les Échos, Nicolas Béraud, CEO of Betclic and President of the online gambling trade body AFJEL, said the tax rises planned in the social security budget were “an incomprehensible tax assault on online gaming”.
Structural harm: He added that while the government had spared land-based casinos and the lottery and retail betting monopolies of PMU and Française des Jeux, the tax hikes on OSB and poker operators would reach more than 70% of their GGR and endanger “the competitive structure that has been hard-built since 2010”.
Illegal boon: The financial pressures would force smaller operators to cease trading and be even more of a boost to the illegal operators already targeting the market, he added.
Distorted competition: Béraud added that “such a decision could even amount to disguised State aid, designed to favour the historic monopoly of La Française des Jeux by exacerbating the tax distortion with its private competitors”.
French chaos: France’s politics has been in a state of chaos since President Macron called a surprise election this summer. Marine Le Pen’s party won the most seats but the left wing bloc Nouveau Front Populaire has the most MPs. Both the RN and LFI want Macron to step down before the end of his presidential term in 2027.
Barnier was appointed PM on 5 September. Addressing the French parliament on Monday, he said he could not compromise with more demands from the RN and added: “Each one of us has to assume their responsibilities, and I'm taking mine.”
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ANJ forces Polymarket to block French players
Move follows news of French national VIP known as ‘The Polymarket Whale’ who is rumoured to have won $80m on US election
France block: The crypto prediction market operator Polymarket has ceased to accept French players after the country's gambling regulator, the Autorité Nationale des Jeux, told it to cease trading in the market.
ANJ is understood to have demanded that the Panama-based company Adventure One QSS, which operates Polymarket, geoblock French players.
The French regulator has blocked more than 944 unauthorised urls since the start of 2024 and said its actions were driven by the fact that under French law, Polymarket’s could have been interpreted as unauthorised gambling products, rather than the fact they were carried out using cryptocurrencies.
Unwanted attention: Recall, Polymarket’s profile increased considerably during the US presidential election when, alongside US-based operator Kalshi, it predicted victory for Donald Trump. A few days after the election, the company’s CEO Shayne Coplan was raided by FBI agents, who seized his mobile phone and other electronic equipment.
I come in peace: In other ANJ-related news, President Isabelle Falque-Pierrotin has appointed Jérôme Gallot as its new gambling mediator.
ANJ’s gambling mediation service aims to promote an amicable settlement system for disputes that arise between players and operators. It received 1,523 mediation requests from players in 2023, with 752 deemed inadmissible.
Gallot’s experience includes time at France’s national audit office, the Cour des Comptes, and a spell at the Ministry of the Economy and Finance, where he was Director General for Competition, Consumer Affairs and Fraud Control.
Italy tax revenue drops as black market profits from regulatory changes
Ban and be damned: Italy’s gambling advertising ban of 2019 has played a key role is causing the country’s net gambling expenditure to fall 26% YoY to €4.3bn in Q3, while its gambling tax revenue dropped 16% YoY to €2.2bn during the period, according industry sources.
The latest figures from the Customs and Monopolies Agency (ADM) showed that taxes from the first nine months of the year dropped 6% YoY to €8bn and 2024 is set to be the first year on record that tax intake has dropped (excluding Covid-affected 2020).
Direct causation: Sources drew a direct link between the drop in tax revenue and a rise in the use of black market operators since the introduction of a gambling advertising ban in 2019-20, which the European Gaming & Betting Association (EGBA) estimates to be worth €1bn in revenue in 2023.
“Those players don’t disappear. They’re playing on the black market,” one industry source told SBC News.
The ADM also launched a new licensing scheme for online gambling concessions last month, the first major overhaul of the Italian online gambling sector since its initial regulation in 2011. Further new rules will restrict operators to one app per gambling product type and one website.
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Intralot records -14% drop in Q3 revenue
Foreign flux impacts: Intralot CFO Andreas Chrysos has blamed the company’s exposure to the US, where a big jackpot affected revenue, and foreign currency movements, particularly in Turkey and Argentina, and the company earning less from a revised contract in Morocco for the sharp decline in its Q3 revenues.
The Greek lottery and gaming supplier saw its Q3 GGR drop 14.3% to €84.5m in Q3, while EBITDA sank 16.3% to €32m. European revenue slumped 32% to €51m for the first nine months of the year and while the company has a much larger exposure in the Americas, EU revenue dropped 9.4% to €157.6m
Big sky targets: The company is expecting big things from a series of new contracts with Canada’s British Columbia Lottery Corporation. It went live with a new central lottery system for retail outlets in May, launched a retail sportsbook in August, then signed the contract for the i-Lottery in September.
Intralot is waiting on the outcome of various bids for lottery contracts in US states Missouri, Illinois, Maryland and Nebraska.
News shorts
Veikkaus launches live casino games
State-owned Finnish betting and gaming monopoly Veikkaus has launched its first live casino experience via a partnership with Playtech.
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