Gambling Industry in France Opposes Tax Hikes

In a historic turn, operators canceled all horse races in France on November 7. The cancellation came as the gambling industry in France protested the government’s proposed tax hike on sports betting.

Leading jockey Christophe Soumillon was among the prominent trainers and industry figures who converged on the capital to voice their disapproval. Experts believed Thursday’s racing cancellations caused around €3 million in damages. Proposed modifications would increase taxes on the gross revenues from horse racing bets, prompting the organization of the event.

Under the proposed changes, the tax rate for bets placed on the physical network (e.g., at racecourses or betting organizations like PMU or Pari Mutuel Urbain) would rise from 6.9% to 7.5%, and for bets placed online, from 6.9% to a substantially higher rate of 15%. Also, the tax hike would harm people starting a sports betting business in the country.

Gambling Industry in France United Against Tax Increases

Under the new law, revenue from specific casino games, operator advertising, promotional efforts, and online and offline sports betting are all targeted for tax increases. Online sports betting would see a tax hike from 10.6% to 15%, while in-person sports betting would see a rise from 6.6% to 7.6%.

Industry heavyweights claim that this change will cost the sector an extra €115 million in taxes. These new levies are an element of French Prime Minister Michel Barnier’s broader effort to rein in the country’s ballooning fiscal imbalance. To stave off mounting economic pressure, Barnier proposed a budget proposal that included tax increases of €20 billion and cutbacks to public spending of €40 billion.

The administration must implement all these adjustments to stabilize the country’s finances. Proponents of the gambling and horse racing industries, meanwhile, contend that the planned levies will ruin their industries.

Protesters in Paris included over 26,000 members of 11 different unions and groups related to the horse racing industry. Many people thought horse racing, which employs many people and makes a lot of money, would lose bettors if the business had to pay more taxes. Although people know how to easily open a sportsbook, high taxes will make them think twice about becoming bookies.

High Taxes Bad for the Industry

For 2023, the PMU, the biggest betting provider in France, predicted a turnover of €9.3 billion from horse racing bets. If the proposed tax cuts were to become law, this figure would likely plummet. Protest organizers are worried about the far-reaching effects of the additional taxation. Those in charge of the sector are worried that the impending tax hike would deter investors and drive small businesses out of existence.

Also, horse racing proponents argue that the regulations would be counterproductive in the long run. They may discourage betting on the sport or lead users to unregulated sites.

The industry as a whole would wind up far smaller. All sorts of people who make a living off horse racing—from bettors to trainers, breeders, and jockeys—would feel the effects.

The tax plan is currently undergoing the French parliament’s protracted legislative procedure. Up until about the middle of December, you can expect to hear debates in the Senate and the Assemblée Nationale. Whether the government successfully enacts the plan in its current form is unknown, as the budget is subject to review and possible revisions. Increasing taxes is not part of the strategy to make sports betting more attractive.

The scenario is becoming more complicated since France is considering starting an online casino. There has also been a tidal wave of debate around this plan. While French law now permits internet wagers on sporting events, poker, and horse racing, the country’s government has long restricted online gambling establishments.

The current gambling sector in France, mainly centered on the PMU network and other regulated venues, is worried that more online development could damage the ecosystem as a whole and destabilize established betting channels.

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