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EC Decision on French Horse Racing
Wednesday June 19,2013 : EC DECISION ON FRENCH HORSE RACE BETTING LEVY A CONCERN
Industry bodies question justification for decision
A European Commission decision announced Wednesday approving the implementation of a 5.6 percent levy on online horse-betting stakes in France has the Remote Gambling Association and the European Gaming and Betting Association (EGBA) concerned.
The levy, initially proposed at 8 percent, will fund "the improvement of the equine species and the promotion of horse breeding" and was first submitted in 2010 by French authorities prior to the online market opening when Pari Mutuel Urbain (PMU) held the monopoly of the horserace betting market.
According to an EC statement, PMU currently funds 80 percent of the French horse racing sector (breeding, training centers, equestrian centers, etc.), which employs some 74 000 people and is present throughout France with a total of 250 racecourses.
The RGA and the EGBA are questioning the decision based on whether the application of the levy falls under the category of "services of general economic interest" (SGEI), an exception under the prohibition of State Aid as outlined by European Union rules.
"The Commission’s decision in the French horserace betting levy case has only just been made and will be reviewed thoroughly by the betting industry and other stakeholders. The industry will seek assurances from the Commission where it has cause for concern and subsequent legal challenges have not been ruled out. The industry will scrutinize previous Commission decisions and standing case-law to see if horse breeding can indeed be categorised as a service of general economic interest (SGEI)", said the RGA in a press release.
The RGA noted that French sports revenues after the opening of the market have not been diminished as originally feared with overall stakes on online horserace betting showing an increase of 9 percent between 2011 and 2012 from Euro 1034 million to Euro 1124 million and that the overall stakes bet online with PMU have increased by 11.1 percent over the same period amounting to Euro 971.1 million and an online market share of 86 percent.
The 5.6 percent para-fiscal levy will be applied from January 2014.
The RGA's full statement can be accessed at: http://www.rga.eu.com/data/files/press2013/Draft_RGA_EGBA_-Statement_on_Levies_-_June_2013_final.pdf
The European Commissions decision can be read at: http://europa.eu/rapid/press-release_IP-13-568_en.htm?locale=en
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