French Online Gambling on E.C. Hot Seat

10.06.2009, The European Commission is on the case as it makes noises concerning the French draft regulations on online gambling.

The EU Commissioner for Enterprise and Industry, Guenther Verheugen is questioning the legality of a number of aspects of the French draft law. It has given French authorities until July 8th to formally respond to the Commission’s concerns.

The main points highlighted in the Commission’s Detailed Opinion, which was given to the French authorities in March 2009, relate to restrictions of the freedom to provide services under Article 49 of the European Commission's Treaty, The requirement for operators to recognize the rights of sports organisers, and the issue of limited payback ratios to players is also on the list of revisions.

The Commission found fault with the French requirements that operators must get permission from rights holders to use event names when offering betting products. The European Commission has asked the French Government to produce evidence substantiating their claims regarding the influence of high maximum payout ratios on addiction.

A number of major French and international companies are already positioning themselves as contenders in anticipation of the opening up of the online gambling market. The formation of the Online Games Regulatory Authority or the Autorité de Régulation des jeux en ligne (ARJEL) regulatory body is part of the proposal set forth in the Detailed Opinion.

Limited to "online horse race betting, sport betting and games consisting of shared games which depend on skill, whereby the player, after the intervention of chance, demonstrates his/her will and decides, in relation to the strategy adopted by the other players, to use a strategy which is likely to increase the chance of winning (for example online poker)" will be allowed if the French laws come into effect in 2010. It was noted that any curtailment of the freedom of an outside provider of gambling services in France had to be justified by imperatives in the general interest, such as consumer protection and the prevention of fraud.

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