French Senate Approves Gambling Tax Hikes
On November 21, the French Senate approved significant gambling tax hikes. These tax increases were part of the increases on various consumer products. The tax changes were implemented in the government’s effort to address budget deficits. Thus, lawmakers targeted industries with high-profit margins.
The reforms caught some industry insiders off guard when they were included in the final version of the country’s Social Security budget. At one point, the gaming business was considered exempt from proposed tax increases.
If the measures are implemented, lotteries, casinos, and sportsbook operators will suffer the most. The gains are projected to be around 10% greater than the existing levels, although they differ per gambling activity type. The current tax rate for operators is close to 55% of their total gaming income. The increased taxes might deter people from learning how to be a bookie in France.
Gambling Tax Hikes
The lowest rise will be in sports betting. Instead of the 4.4% rise proposed in an earlier budget, online and retail companies would pay 1% extra. The National Assembly rejected the original plan only last month, so this decision is even more surprising given the political pushback. French gaming company Française des Jeux (FDJ) didn’t expect the legislation to go any further.
The government anticipates a yearly rise of €50 million from the gaming tax increases. These taxes are collected to alleviate the country’s widening budget deficit by increasing the gaming industry’s financial contributions.
Nevertheless, not every casino region felt the effects. The horse racing industry vehemently opposed the tax increase, claiming that the industry and its related firms would suffer under more financial constraints. As a result, the industry decided to exempt horse racing betting from the increase.
Opinions on the decision are divided. Those in favor of the tax hikes say the gambling industry is well-positioned to pay for itself since it has made a killing. Senator Thomas Dossus has the hike’s unwavering backing. He said the operators of online gaming are like parasites that add to the pollution of our planet. However, experts who viewed pay per head sportsbook comparisons disagree with his opinion.
Mixed Reactions from the Gambling Industry
According to the country’s gaming authorities, casinos in France earned €13.4 billion in 2023. Those who favor the tax hike view it as a way to share income while ensuring the industry’s long-term viability.
However, detractors point out that the tax rises may have unforeseen effects, such as less industry investment and higher consumer prices. It may be more difficult for smaller operations to handle the extra costs.
Reduced competition or unanticipated market consolidation might result from this. On the other hand, it might spark a dramatic increase in the popularity of offshore gambling sites. Former head of France’s gambling authority AFJEL and current head of the French Football Federation (FFF) Jean-François Vilotte voiced his worries.
In an interview with French media, he expressed concern that the planned tax rises might jeopardize the financial health of many sports organizations and the very essence of sports itself.
The Senate also authorized increased levies on sugary beverages, tobacco goods, and gaming. The government anticipates an additional €200 million in yearly tax income from the imposition of even higher levies on tobacco, a policy that has long been the subject of tax rises in the name of public health.
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