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Vive l’Europe

Francis Bacon once said that ‘the French are wiser than they seem’, and from the perspective of gambling legislation, he might have had a point.  Faced with pressure from Brussels to open their market, and domestically not to, they created a compromise that is, well, so very French: they’ve told the world they’ve done one thing (open the market), when actually they’ve done almost exactly the opposite.

This should come as no surprise: it is a French technique par excellence. During the Cold War, Charles de Gaulle defined his country’s post-war identity with inflammatory rhetoric against the United States in speech after domestic speech; but every time crisis loomed, he was quick to tone down his language internationally and hide under an American umbrella. Politics is what the French do best.

But one man’s politics is another man’s double-dealing. The question is whether, in this instance at least, it will lead to long-term success.

I rather doubt it. The straight figures relating to how many operators have sought licensing from ARJEL (27, as we go to print) is one thing; the names that are missing, another.  The issue is not which brands, but which products: where a given product is missing, those who want it, or seek it at fairer value, will go and search wherever it exists.

For the foreseeable future, that will mean outside France’s borders. The French may insist that they can regulate the internet to hold their line, but most observers would say ‘bonne chance’: a black market and loss of control looms. But that makes it no more likely that France will revise what they have in the near future: there will be enough to show in tax revenues for them to claim that what they’ve created works; and they will argue that the alternative is no better.

To be fair, they have a point. The 2005 UK Gambling Act got it about 80% right, but by failing to tally fiscal and regulatory legislation, the British government ended up with so few operators under their jurisdiction that it hardly mattered that they had made a law. It is ironic that, in a different way, the French are about to make the same mistake.

Looking for an alternative to the British model should not have meant insisting that regulating to allow proper competition (and with it innovation and fair pricing) would lead to riots in the streets, as le Senateur Trucy told me with an entirely straight face (and got quite angry with me about when I scoffed at the suggestion). But lobbying in France, in my experience, is more wearying than anywhere else in the world precisely because of their unwillingness to take advice from les Anglo-Saxons.

French legislators insist that France is different, but if it’s anything, it’s ten years behind. Its racing industry might be better-funded, but that’s because of the lack, historically, of competing betting product, and competition is coming whether the law allows for it or not, because that’s just the modern world. It’s fair to assume that its numbers will take a bath in the coming decade.

The danger is that in failing to recognise that, some will view France’s model as a success. Choosing merely to tweak it as they create their own, rather than following, say, a Danish model that recognises the reality of modern consumer behaviour, is unlikely to undo some of the obvious problems. The bad news for the gambling industry is that Bacon continued his thought with ‘and the Spaniards seem wiser than they are’.  Five hundred years on, we’d better hope he was wrong.

I originally wrote this article for iGaming France, and it was published last week. The French translation of it is available here.

Posted in Betting industry, Europe, Regulation.

Tagged with , , , .

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Continuing the Discussion

  1. Sentiment | Mark Davies linked to this post on December 12, 2010

    […] but I think they’d be wrong. France might not be ideal for Betfair, but the reality is, it’s not ideal for anyone, and in my view it is as likely to change for the better in the next 18 months as it has ever been; […]

  2. Are you watching in Greece? | Mark Davies linked to this post on February 2, 2011

    […] just withdraw from their markets, and leave the pitch free for the incumbent former monopolies. Commentators with a third braincell have observed that the more likely alternative outcome would be that the operators who frankly can’t be […]

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