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French targetting online gambling operators
2/10/10 - Three of France's biggest land casino operators - Tranchant, Barrière and Joagroupe, which run a total of 104 casinos between them, have launched litigation in the Paris Criminal Court designed to keep foreign online gambling companies at bay in a soon-to-be-liberalised French gambling market.
So far the French action has targeted four major online gambling operators, seeking to bar them from being granted French licenses: Sportingbet, Unibet, 888 Holdings and Bwin.
The legal assault could constitute an important test case and a potent weapon for French companies to exclude competitors. It is based on the grounds that the defendant companies have flouted the law by setting up French language sites to tout for custom in France without waiting for parliamentary approval.
Initial filings accuse the defendants of violating French legislation in "a deliberate and patent manner'' and call for licences to be withheld for two years.
Reporting on the litigation, The Times this week opined that if the lawsuit is upheld by French judges, the four Internet firms would find themselves at a notable disadvantage in a market thought to be worth hundreds of millions of Euros a year. Licensed operators are likely to dominate since they will be allowed to advertise.
The newspaper quotes Sportingbet's legal representative, Maitre Martine Karsenty-Ricard, who said the Paris court had no jurisdiction over companies operating outside France and urged judges to throw out the lawsuit.
"The case, which is likely to end Wednesday, comes two weeks before the French Senate is expected to back a bill authorising private online gamblers to apply for licences. The legislation has already been approved by the National Assembly, the lower house of parliament, and is likely to come into force in time for the French to bet on the World Cup," The Times reminds its readers.
About 100 operators will apply for a licence, according to French government estimates, but only about half will be successful. They will have the right to take bets on racing, other sports and poker, but not on activities such as slots, considered by French officials to be dangerously addictive.
The new operators will face high tax rates which critics say are intended to favour the two state monopolies which currently control the French market - Pari Mutuel Urbain (PMU) and Française des Jeux (FdJ). An estimated 3 million French people already bet online with sites operating outside France.
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