Concerns over Announced Levy on Online Horse-Betting Stakes in France

Remote Gambling Association and the European Gaming and Betting Association (EGBA) expressed their concern after European Commission issued a decision announcing approval of a 5.6% levy on online horse-betting stakes in France to be applied as of January 2014.

Initially proposed at 8%, the levy is supposed to enable "the improvement of the equine species and the promotion of horse breeding".

French authorities first submitted the proposal in 2010 before the online market opening when Pari Mutuel Urbain (PMU) held the monopoly of the horserace betting market.

As per the EC statement, PMU presently funds 80% of the French horse racing sector (breeding, training centers, equestrian centers, etc.), which employs around 74 000 people and is present all over France with 250 racecourses in total.

RGA and EGBA are challenging the decision and asking whether 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.

In its press release, RGA said: "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)."

Additionally, RGA noted that, following the market opening, French sports revenues have not been diminished as originally feared, with overall stakes on online horserace betting growing by 9% between 2011 and 2012 from EUR 1034 million to EUR 1124 million whereas that the overall stakes bet online with PMU have grown by 11.1% over the same period amounting to EUR 971.1 million and reaching an online market share of 86%.

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