Tax hike anxiety

France’s new government under Emmanuel Macron’s successor as Prime Minister, Michel Barnier, has sent gambling firms into a tailspin after news of proposed tax hikes on the sector.

will hit online sportsbooks and horse racing sites the hardest

Les Echos revealed that the Barnier administration will, on Thursday, publish plans to levy higher taxes on gambling firms. The proposed hikes will hit online sportsbooks and horse racing sites the hardest. France’s retail lottery, online poker companies, and retail casinos are also bracing for the hit, which extends to online operators’ marketing spend.

The trade body representing France’s 200 land-based casinos, Casinos de France, said the hikes will increase the load on the “most heavily taxed sector” in Europe.   

Casinos de France said the proposed move would threaten 45,000 jobs and that the planned 10% gross gaming revenue tax on Paris gaming establishments would be “signing their death warrant.”

Rising taxes

According to Les Echos, Barnier’s tax increases are expected to bring in €1.6bn ($1.75bn) and boost the country’s family health and social care provision funds by €400m ($438m) per year. 

France’s new regime could introduce the hikes into primary legislation or via amendments at the imminent parliamentary budget debates.

Currently, gambling firms pay a “social contribution” tax sliced from a percentage of their GGR. 

Media reports state France’s online sports betting and retail slot machine operators pay a 10.6% social contribution tax, while the lottery pays 8.4%, horse racing pari-mutuel operators pay 6.9%, and brick-and-mortar sports betting firms pay 6.6%. Casino GGR of over €1,500 ($1,644) is taxed at 16.7%.

Under the proposed new social levy hikes, all online sports betting taxes will rise to 15%, retail horseracing taxes to 10%, and lotteries and casinos taxes to 9.2%. iGaming firms such as Betclic, NetBet, and Winamax already pay around 55% in GGR taxes outside of the proposed new social levy.

Paris-based gaming establishments, known as cercles de jeux, were previously exempt from social security taxes but will be required to pony up 10% of their GGR.

Body bites back

Casinos de France has come out swinging in anticipation of the tax hikes, with the trade body stating it already contributes over €1.5bn ($1.6bn) in taxes per annum to government coffers and local communities.

Casinos de France said the move would put at risk 45,000 jobs and would be signing a “death warrant” on Paris gaming firms

President of Casinos de France and CEO of Barrière Groupe, Grégory Rabuel, stated the “increase in taxation would worsen an already difficult situation for our sector, which is the most heavily taxed in Europe.”