Online : Finnish and French models

Virve Pöysti University of Helsinki Department of Social Research

Virve Pöysti University of Helsinki 12.1.2 1 www.helsinki.fi/yliopisto Department of Social Research 012 in Europe

- Three models of online gambling in Europe (www.senat.fr)

Partly deregulated Fully or almost fully No online gambling online gambling deregulated online markets markets gambling markets • Finland, Sweden, • France, The • UK, Italy, Latvia, Portugal, Slovenia, Netherlands, Luxembourg, Czech Republic Belgium, Bulgaria, Malta, Slovakia, Spain, Ireland, Estonia Austria, Cyprus, Lithuania, Poland, Romania, Germany, Denmark, Hungary

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in Finland (1)

- In principle only online gambling offered by monopolistic gambling providers allowed (RAY, Veikkaus, Fintoto) - Online versions of offline games - RAY online also offers and other casino games

(www.ray.fi/kasino)

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in Finland (2)

- However, no legislative means to ban overseas offer in Finland. - Online gambling on foreign sites is not illegal and any wins can be cashed in. - Promoting online gambling offered by others than the Finnish actors is illegal. - Online casino offer in Finnish by PAF and countless overseas providers (63 counted in 2010)

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Gambling in France

La française des Jeux • State owned company (72% ownership) • Traditional monopoly provider of and betting on sports

Pari mutuel urbain • State controlled economic interest group composed of 51 racing authorities • Traditional monopoly of betting on horses

Private • 196 casinos in France, largest groups Partouche (45 casinos) and Barrière (33 casinos) • Sole providers of EGMs and casino games

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research

Online gambling in France: Situation before 2010

- Online versions of traditional games available on the websites of PMU and FDJ (lotteries, scratch cards, betting on horses).

- Action against overseas providers: • 2005: Zeturf vs. PMU • 2006: Bwin arrests following a complaint made by FDJ • 2007: A law forbidding advertisement of unauthorised gambling provision in France. Violators are subject to fines and a block of financial transactions. • 2009: FDJ challenges overseas competition (e.g., Betclic, Bwin) by opening an online service.

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: The law of 2010 (1)

- Law 2010-476, 12.5.2010 partially opens the online gambling market to operators from other EU countries.

- Passed due to EC request to open the market.

- The law aims at: • Opening online gambing markets to competition by granting publicly controlled licenses. • Increasing the offer of online gambling by legalising new games (poker) • Channelling illegal gambling to authorised websites. • Protecting consumers (preventing problem and excessive gambling)

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: The law of 2010 (2)

- Three types of licenses granted: • Online sports betting • Online horse race betting • Online poker

- Games that remain illegal: • Online casinos (other table games besides poker) • Online EGMs • Spread betting • Lotteries and scratch cards for other providers than FDJ

- According to the lawmakers, these games remain illegal due to their addictive nature. Poker is legalised since it is considered partly a .

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: The law of 2010 (3)

- Any licensed operator is subject to:

• A tax of 7.5 % on all bets placed on sports or horse race betting services and a tax of 2 % on all bets placed in poker. • Have a French address. • Prevent problem gambling.

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: New operators

- Currently 19 authorised operators with a total of 50 websites proposing gambling (www.arjel.fr) - Number of providers is going down (26 in 2012) - Traditional operators: Authorité de Regulation des Jeux en Ligne

- And new providers (including):

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research

Online gambling in France: Measures of control

- ARJEL (l’Autorité de régulation des jeux en ligne) authority designed to regulate online gambling (2010) • Licenses online gambling providers (5 year licenses) • Defines the technical and legal obligations of operators. • Control over authorised providers. • Ŕevokes licenses when required • Fight against illegal online gambling provision

- Obligations of consumer protection imposed on providers: • Registration of all users, age limit of 18. • Limitations of accounts. • Some (FDJ) also use Playscan

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: Illegal online gambling? (1)

- About 15-20 % of online gambling still occurs on illegal sites (senat.fr)

- Penalties imposed on unauthorised providers offering services in France: A possibility of 3 years of imprisonment and a fine of 90 000 € (or more if organised crime).

- Fine for advertising a unauthorised provider (20 000 € minimum).

-Blocking financial transactions of unauthorised sites in France or preventing access to unauthorised sites from French IP addresses.

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: Illegal online gambling? (2)

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: Since the law of 2010

- Positive feedback from the European Union: • Consumers have more choice. • A legal alternative to illegal online gambling.

- But also criticism: • Small online operators: The system benefits national and big operators. • Brick-and-mortar casinos losing clientele. • Authorised operators: Costs of offering legal gambling too high to compete with illegal offer. Low return percentages (85 %), limited offer of games. Some providers have relinquished their online activities as unprofitable (Partouche).

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research Online gambling in France: Popularity

- Online poker: Initial success but popularity has since declined.

- Sports betting: slow start but improvement since 2012. Horse race betting is stagnating.

-The traditional providers persist are even the great benefitors from the law of 2010. Profits of PMU and FDJ rising. Lähde: Le Figaro 7/2/2012

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research

Conclusion: The French model and Finland?

- Following the law of 2010, online gambling markets in France have been partially opened to outside providers.

- The change has had more political than market impact: FDJ and PMU maintain their positions as market leaders.

- Is it neccessary to fear the end of gambling monopolies in Finland? Or would the French example indicate that consumers remain loyal to traditional providers?

- All consequences of the reform in France cannot yet be known. But following the French situation may offer interesting alternatives to Finnish online gambling policies.

Virve Pöysti University of Helsinki www.helsinki.fi/yliopisto Department of Social Research