Issues Surrounding the Legal Opening of Online Gambling in France

Jean-Michel Costes (will be presented in French)

Research Chair on Gambling, Montreal September 10, 2014

[email protected] 10/09/2014 Outline

The legal framework : Issues of § online in Europe gambling in France §in France

Legal framework

Gambling in Current situation surrounding gambling in France France Online gambling in France

Conclusions Current situation surrounding online gambling in France §Data on regulation §General population surveys

Conclusions

EU: action plan

Action Plan 2012 on online gambling Issues of online ÷ gambling in Current situation (Livre vert) France Legal framework No common regulation but recommendations based on the Gambling in France following principles:

Online gambling in §Compliance of national legislation with EU France regulations Conclusions §Protection of consumers and citizens §Prevention of money laundering and fraud §Preservation of the integrity of sports

[email protected] 10/09/2014 EU: recommendations

Issues of online Recommendations for the protection of gamblers (2014) gambling in France

Legal ÷ Protection of minors (offers, publicity) framework ÷ Information on risks Gambling in France ÷ Responsible advertizement

Online ÷ Procedure to open a personal account for players gambling in France ÷ Game moderators Conclusions ÷ Self-exclusion

÷ Phone help-lines

÷ Training of operators’ employees

[email protected] 10/09/2014 France: legal framework

Issues of Law of 2010 online gambling in France

Legal framework § The context of the law of 2010

Gambling in France

Online gambling in § Regulatory bodies established by the law France ÷ Conclusions ARJEL

÷ CCJ

÷ ODJ

[email protected] 10/09/2014 An illustration of the role of ARJEL: supply control 6

Sites monitored since the opening in June 2010 until March 1, 2013

3068 sites monitored by DEC Issues of 921 other sites online - directories, comparators gambling in France - information sites 2147 sites for sports betting, horse race betting, poker, and casinos added to roster of automated - offers of skill-based games Legal data processing for illegal sites and free or so-called free framework games

Gambling in France 1990 sites conforming * Online gambling in France

Conclusions 833 sites conforming 36 sites conforming 1121 sites conforming after receiving notice following inaccesibility 74 sites under “spontaneously” 83 sites pending action of law suit by ISP blockage investigation

1398 notices served 952 sites served notices - multiple notices served to same site - actions against website hosts

* sites that do not meet the criteria to qualify as 10/09/2014 [email protected] french web site address France: changes stemming from the law of 2010 7

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Offers of legal gambling in France

•The casinos, numbering about 200, posess a fleet of 23,000 slot machines Issues of online gambling in •The horse race betting (Pari mutuel urbain), state- France controlled, manages betting on horse racing Legal framework •La Française des jeux (FDJ®), a state monopoly, Gambling in France manages raffles, sports betting, and scratch card games Online gambling in France •The operators of online games, approximately 30, run

Conclusions licensed gambling sites covering three domains: sports betting, horse race betting, and poker

[email protected] 10/09/2014 Gambling in France

Issues of online gambling in France

Legal Framework

Gambling in Statistical and administrative data France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Gambling: Spending of the French people 10 Net spending per inhabitant 160 € 138 € 140 € 120 € Issues of 100 € online 80 € gambling in France 60 € 40 € Legal 20 € Framework 0 € Gambling in 1972 1974 1976 1978 1970 1962 1992 1964 1994 1966 1996 1982 1984 1968 1986 1998 2012 1960 1990 1988 1980 France 2010 2002 2004 2006 2008 2000 Source: INSEE, les comptes nationaux Online gambling in Portion of the budget spent on gambling France 1.00% 0.80% 0.90% Conclusions 0.80% 0.70% 0.60% 0.50% 0.40% 0.30% 0.20% 0.10% 0.00% 1972 1974 1976 1978 1970 1962 1992 1964 1994 1966 1996 1982 1984 1968 1986 1998 2012 1960 1990 1988 1980 2010 2002 2004 2006 2008 Source: INSEE, les comptes nationaux2000 [email protected] 10/09/2014 Gambling: the gambling industry (1)

Chiffre'd'affaires'des'jeux'd'argent'et'de'hasard'par'filière'Revenues from gambling per sector '(mises';'en'M€)'(bet, in M€)

Issues of 50!000!M€! online gambling in 45!000!M€! France 40!000!M€! Legal Framework 35!000!M€!

Gambling in France 30!000!M€!

Jeu!en!ligne!Online Online 25!000!M€! gambling in Casinos!Casinos France 20!000!M€! PMU!HRB Conclusions FDJ 15!000!M€! FDJ!

10!000!M€!

5!000!M€!

!0!M€! 2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012! 2013! 1995! 1996! 1997! 1998! 1999! Source!:!ODJ! [email protected] 10/09/2014 Gambling: the gambling industry (2)

Produit(brut(des(jeux(d'argent(et(de(hasard(par(ﬁlière(Gross product from gambling per sector ((mises(9(gains(;(en(M€)((bet - win, in M€)

Issues of 12!000!M€! online gambling in France 10!000!M€!

Legal Framework 8!000!M€! Gambling in France

Jeu!en!ligne! Online 6!000!M€! Online gambling in Casinos!Casinos France PMU!HRB Conclusions 4!000!M€! FDJ!FDJ

2!000!M€!

Produit(net(des(jeux(d'argent(et(de(hasard(par(ﬁlière(Net product from gambling per sector (bet((mises(8(gains(8(taxes(;(en(M€)( – win – taxes, in M€) Issues of 5!000!M€! online gambling in 4!500!M€! France 4!000!M€! Legal Framework 3!500!M€! Gambling in France 3!000!M€!

Jeu!en!ligne!Online Online 2!500!M€! gambling in Casinos!Casinos France 2!000!M€! PMU!HRB Conclusions FDJ 1!500!M€! FDJ!

1!000!M€!

!500!M€!

!0!M€! 1995! 1996! 1997! 1998! 1999! 2000! 2001! 2002! 2003! 2004! 2005! 2006! 2007! 2008! 2009! 2010! 2011! 2012! 2013! Source!:!ODJ! [email protected] 10/09/2014 Gambling: population approach

Issues of online gambling in France

Legal Framework

Gambling in Results of the 2010 national survey France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Baromètre Santé 2010 – Volet Jeu

15 Methodology

Issues of online gambling in Partnership OFDT/INPES France

Legal Framework

Gambling in Phone survey, computer-aided telephone interviews France

Online (CATI) gambling in France Two stage random sampling Conclusions Field dates: 22 October 2009 - 3 July 2010 Refusal rate ≈ 40% 25,034 individuals aged 18-75

[email protected] 10/09/2014 Types of players

Issues of online 47.8% gambling in GamblersGamblers France (having played at least once in the last 12 months ) (having played at least once in the last 12 months ) Legal Framework

Gambling in France Regular spending + Online 500€ gamblers gambling in France play + 52 times / y 3.4% Conclusions 4.7% 10.9%

Active gamblers 12.2%

[email protected] 10/09/2014 “Problem” gambling: prevalence

"Pathological' "Problem" CPGI : prevalence in % IC at 5 % Gamblers Gamblersgamblers Issues of online in the general population gambling in France Non gamblers or non 98.7 [98.5-98.9] Legal problem/low-risk Framework Moderate-risk gamblers 0.9 [0.78-0.94] Gambling in 1.3 France Excessive gamblers 0.4 [0.38-0.50] 0.4 Online gambling in in active gamblers France Non-problem gamblers 77.1 [76.1-78.1] Conclusions Low-risk gamblers 12.2 [11.4-12.9] Moderate-risk gamblers 7.1 [6.4-7.7] 10.7 Excessive gamblers 3.7 [3.2-4.1] 3.7

[email protected] 10/09/2014 PG: France and the world

Current "gambling problems" for countries with indicators

Netherlands 0.9 Issues of online Germany 1.0 gambling in Switzerland 1.3 France France 1.3 Legal Framework NZ 1.7 Quebec 1.9 Gambling in Pathological France Belgium 2.0 gambling

Online Sweden 2.2 Problem gambling gambling in France Great Britain 2.5

Conclusions Finland 2.7 Italy 2.8 Canada 3.2 Norway 4.4 Australia 4.9 USA 5.5

0.0 2.0 4.0 6.0 8.0 10.0 12.0 [email protected] 10/09/2014 Online gambling (OG) in France

Issues of online gambling in France

Legal framework

Gambling in Data on regulation France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Amount spent per trimestre (in million euros) 2500

20 2000

1500

Issues of online 1000 gambling in T4 2010 T1 2011 T2 2011 T3 2011 T4 2011 T1 2012 T2 2012 T3 2012 T4 2012 T1 2013 T2 2013 T3 2013 T4 2013 T1 2014 T2 2014 France Poker (cash-game & tournament) Source : ARJEL

Legal framework Amount spent per trimestre (in million euros) Gambling in 400 France

Online gambling in 300 France

Conclusions 200

100

0 T4 2010 T1 2011 T2 2011 T3 2011 T4 2011 T1 2012 T2 2012 T3 2012 T4 2012 T1 2013 T2 2013 T3 2013 T4 2013 T1 2014 T2 2014 Sports betting Horse race betting Source : ARJEL

[email protected] 10/09/2014 Online gambling (OG) in France

Issues of online gambling in France

Legal framework

Gambling in Results of the 2012 national survey France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Enquête Prévalence-e-JEU 2012; ODJ

Issues of online gambling in Support: monthly phone survey, "l’Observatoire des France Usages Internet" from Médiamétrie Legal framework

Gambling in France ÷ Phone survey among a random representative sample of Online gambling in the French population. France

÷ Conclusions 3 survey waves: Sept-Nov 2012

÷ N = 2,761 French residents aged 18+

[email protected] 10/09/2014 Enquête e-ENJEU 2012; OFDT/ODJ

23 Online panel “Media Square" from Médiamétrie •Address base of 830,000 internet users Issues of online •Survey period: 4 weeks, from November 12 – December 11, 2012 gambling in France •Sample of 20,000 French internet users aged 18-75 Legal framework •Fixed quotas on sampling of internet users to ensure

Gambling in representativity (criteria: gender, age, region and profession) France

Online based on data from the Observatoire des Usages Internet de gambling in France Médiamétrie, 2nd trimester 2012

Conclusions •Final sample used in the analysis: N = 4,043 internet users who reported having gambled online in the past 12 months

[email protected] 10/09/2014 Prevalence of online gambling

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

Which amounts to approximately 2 million people

[email protected] 10/09/2014 Profile of online gamblers: gender, age

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Profile of online gamblers: socio- demographic 26

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 OG practices: types of games

Prevalence of type of game among online gamblers (n=4,043) in %

100.0 Total Issues of 72.1 online 58.2 gambling in FDJ * 66.4 France 20.4 Other raffles/scratch cards 0.0 Legal framework 19.2 Poker 8.9 Gambling in Free 16.4 France Sports betting 11.8 11% Online 13.8 Online gambling Horse race betting 13.0 gambling in "Traditional" gambling France 11.6 Other games 2.1 Conclusions Skill games 7.2 Slot machines 14.7 10%

4.0 Casinos (excluding poker) 6.6

0.0 20.0 40.0 60.0 80.0 100.0

Source:Enquête e-ENJEU2012; OFTD/ODJ * Key: 58.2% of online gamblers have played FDJ games online over the past 12 months; 66.4% have played them at the point of sale. [email protected] 10/09/2014 OG practices: frequency of gambling

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 OG practices: spending

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 OG practices: gambling medium

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Perceptions of online gamblers: advantages 31

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Perceptions of online gamblers: inconveniences 32

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Problem OG: prevalence

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Is the regulation effective ?

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Does the regulation protect?

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Does the regulation protect?

Issues of online gambling in France

Legal framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Conclusions (1)

Issues of online gambling in France

Legal Framework

Gambling in Return to the objectives of the law France

Online gambling in France

Conclusions

[email protected] 10/09/2014 38

Issues of online gambling in France

Legal Framework

Gambling in France

Online gambling in France

Conclusions

[email protected] 10/09/2014 Conclusions (2)

What is known about OG in France:

Issues of online üOG concerns 3.7% of the French population gambling in France üYoung people, people with college/university education, and

Legal well intergrated Framework

Gambling in üMore intense and problematic practices France • 10.4% of gamblers are moderate risk Online gambling in • 6.6% are excessive gamblers France

Conclusions üMostly a legal offer of games, but not exclusive § 55-80% § Practices focuse on offering illegal games that aren’t available legally üEmergence of "free" sites üDevelopment of new mobile gambling devices

[email protected] 10/09/2014

Conclusions (3)

Challenges for the coming years:

Issues of online gambling in France üDevelop specific preventative measures of online gambling

Legal problems, adapted to this particular population Framework

Gambling in France ü Online Re-examine the foundations of public policy: gambling in France üIs the "regulation" strategy effective?

Conclusions üResponsible gambling: place of each stakeholder, ethical questions üScope of gambling

üMonitor developments in online gambling

[email protected] 10/09/2014 41

Issues of online gambling in France

Legal Thank you for your attention Framework

Gambling in France

Online gambling in France

Conclusions To find out more:

http://www.economie.gouv.fr/observatoire-des-jeux

[email protected] 10/09/2014