The French gambling revolution

The French egaming industry, which effectively began with the passage of a law “on opening the online gambling and betting market to competition and regulation” in May 2010, was billed as Europe’s next big market. Despite enduring a rocky road over the last few years, the country’s egaming sector has turned a corner of late and is enjoying a period of sustained growth and expansion.

The task of maintaining this positivity falls to the regulator, ARJEL, whose president, Charles Coppolani, outlines his approach.

EGR Compliance: Which of ARJEL’s five missions do you believe is the most important and why?

Charles Coppolani (CC): The government entrusted ARJEL with several missions, which are the prevention of excessive gambling, the protection of minors and those who have self-excluded, ensuring integrity and reliability of gambling operations, preventing criminal activity and fraud in gambling, ensuring the market is attractive and sustainable, and preventing illegal egaming operators from accessing the French market.

In carrying out this mandate, I have always considered that all these missions were of equal importance and that it was my responsibility to obtain results on each of them. This approach is imperative especially as every mission interacts with the other. For example, the fight against illegal gambling contributes at the same time to the protection of the player’s health, the fight against fraud and the sustainability of the legal market.

In the future, however, I have the feeling that the popularity of gambling and other games that do not meet the definition of gambling but do come close by offering micro-transactions accessible to minors, and the prevention of excessive gambling, will become the key issue. To face it, the regulator will need both more resources and an increased capacity for action.

EGR Compliance: What is the greatest lesson that other European regulators can learn from ARJEL’s approach to regulation?

CC: In five years of our regulation we have learned a lot. However, the nuances of each model, legislation and the economic and cultural context of this sector make each regulatory framework unique, so taking lessons from the French market is unnecessary.

On the other hand, European and international cooperation between regulators is essential and I have espoused this throughout my tenure. The shared poker liquidity agreement or the draft of a joint declaration on loot boxes are good examples, but for me it is about long-term action which strengthens the industry, and sharing experiences is a part of this process.

EGR Compliance: You recently called for a reform of the May 2010 laws concerning online gambling to enable ARJEL to meet future regulatory challenges, so what would you change and why?

CC: Indeed, a reform of the regulation of gambling is on the agenda in France, and several reports have been published on this theme in recent months. For my part, I’ve called for a reform of the May 2010 law for several years. The now permanent changes of scale that this industry is experiencing make it necessary to review a text drafted and agreed almost nine years ago.

This reform can be summarised in three common-sense principles: reorganise the entire gambling sector (online and offline) under one regulatory authority because the issues are the same and many players use both distribution networks indifferently and give the regulator room for manoeuvre and adaptability to meet the challenges and changes of the next 10 years. The final principle is to empower the operators, particularly regarding the fight against excessive gambling; they are closer to the players and, therefore, better placed to detect drifts and intervene preventively.

EGR Compliance: Which regulatory challenges is ARJEL not presently equipped to meet?

CC: If we stick to the 2010 model, the regulator will be powerless on all objectives. However, the prevention of excessive gambling and the protection of minors are undoubtedly the objectives for which the consequences of the failure of the regulation would be the most dramatic.

EGR Compliance: In the 2017-18 Annual report, you hailed the significant improvements made in the sports betting, racing and poker verticals after what you called “some difficult years”. How do you approach the role of head of a major regulatory body during a difficult period in the online gambling market?

CC: The licensed online gaming market in France had a difficult time between 2011 and 2016. In 2010, at the time of the opening to competition, many analysts predicted an “el dorado” that did not occur.

There are several causes behind this: a heavy taxation on stakes and not the gross product and a narrow field with too limited an offering – sports betting, horseracing betting, poker and a betting training period for French players. In these conditions, the role of the regulator is to make the best use of all the means at his disposal.

This is what I’ve been trying to do since my arrival in 2014, game segment by game segment. I achieve this by widening the legal offering as much as possible, by maintaining support of the operators and by working in good terms with them, by acting with decision-makers as strength of proposal to develop the legislation, and by fighting illegal gaming and the unfair competition which it represents for legal operators.

EGR Compliance: ARJEL recently revealed a sharp increase in sports betting during the FIFA World Cup. Do you believe this is evidence that the French market and ARJEL’s approach to regulation is working?

CC: The sports betting market in France, which had a difficult start, slightly delayed from other European markets, is now booming and continues to have significant growth margins. Furthermore, our regulatory model strengthens this development by imposing, in the name of the bet integrity, a selective ‘list’ of bets which are excluded from the French market, sports, competitions and other types of results. Bettors could indeed turn away from a ‘product’ with dubious integrity.

EGR Compliance: How was the recent, “Betting must remain a game” problem gambling advertising campaign during the World received by French bettors?

CC: The campaign was very well received. The tone, the form and the humour were, I think, appreciated by the bettors. The objective was not to make players feel guilty or frightened, but to empower them by informing them of the risks and giving them simple rules to stay in a controlled and, therefore, recreational game.  In my opinion, the licensed operators who took part in this campaign relayed this message very well.

EGR Compliance: The French government has announced plans to privatise Française Des Jeux, yet what effect would this have on the French online gambling market?

CC: On the economic front, the privatisation itself should not have a direct effect on the online market regulated by ARJEL. However, Française des Jeux (FDJ) will keep the monopoly of its gambling offer. As such, a close control is imperative so that the objectives attached to gambling can be fulfilled in the best conditions.

The FDJ, once privatised, will be a company unlike any other, therefore the balance between the interests of the shareholders and the risks of public health and public order must be protected. It seems to me that only a strong and an independent regulation can achieve this. This is why I call for the creation of a new independent administrative authority for the entire gambling sector in France.

EGR Compliance: Do you think the shared poker liquidity agreement between France, Spain and Portugal has been a successful one?

CC: It is still too early to say, but as a regulator I am pleased to see the poker situation is improving significantly, as confirmed during the first two quarters of 2018. The liquidity sharing, even if it is not alone in motivating this growth, undoubtedly played a large part.

EGR Compliance: The Italian government has recently implemented a blanket ban on gambling-related advertising. What do you think of this ban and would you consider doing something similar in France?

CC: The extent of the licensed gambling offering in Italy is not comparable to the French situation. A ban on advertising is not on the agenda in France today as there is already advertising regulation. Besides, Public Health France, in collaboration with ARJEL, is to launch updated mandatory prevention messages in the near future.

It should be noted that the CJEU [Courts of Justice of the European Union] admits the ban on advertising that can be conceived for certain addictive games such as online slot machines. However, advertising has the merit of publicising the legal offer.

EGR Compliance: The Dutch government has struggled with the implementation of its own remote gambling act, implementation of which has been deadlocked since 2016. What advice would you give advocates for online gambling reform to push this legislation over the line?

CC: I will be careful not to intervene in a national debate. The Dutch situation shows that the legislation on gambling is closely linked to sociological factors. It is a political issue and it is up to the legislator, in each State, to define the conditions under which gambling must evolve.

EGR Compliance: ARJEL recently declined to follow the lead of other European regulators in banning loot boxes. Do you plan to revisit this decision later? If not, why not?

CC: Indeed, the French position is more nuanced and very close to the Dutch position; it is based on the French definition of gambling and recommends a case-by-case analysis, depending on the possibility or not to monetise the gain removed from the micro transaction. ARJEL’s 2017-2018 Activity report specifies: while, given the French definition of gambling, ‘loot boxes’ cannot be characterised as gambling, the same is not the case when the items can be converted into cash.

The legality of this type of game is questionable when the items are likely to be sold outside the gaming platform and the publisher allows the use of items acquired in other places than its own platform. In this case, ARJEL intervenes and I can confirm that a certain number of investigations are in progress.