iGaming operators in France will likely have to pay tax on gross gaming revenue (GGR) instead of turnover soon. The changes were approved by the country’s Senate for the 2020 national budget, but still need to be finalised.
The bill will now be passed on to the National Assembly. Before these changes can become an official law, they must be approved at this level too.
Possible tax rate changes
If the tax shift is made official, then rates will change. Sports betting will have a new tax rate of 33.8%, while online poker will stand at 36.7%. Meanwhile, horse racing will be taxed at 19.9% GGR.
Online sports betting operators will also have to pay an extra 10.7%, which will go to the National Centre for the Development of Sport.
With all of the taxes combined, online sports betting operators will owe 55.2% in total. Horse racing brands will pay 33.7% and online poker will stand at 40.8%.
The previous conditions
Prior to these proposed changes, what betting companies paid depended on the amount of money that players staked. The main tax rate for online sports betting was 9.3%, with online horse racing being the highest at 13.2%. Online poker brands had to pay 2%.
Social security contributions for the above verticals were 1.8% for sports betting and horse racing, and 0.2% for poker.
When approving the new tax regulations, the French Senate said: “In recent years, several reports have highlighted the binding effect of the levy on players’ stakes and not on GGR.
“[Online gambling regulator] ARJEL thus notes, in its 2015-2016 activity report, that ‘the tax on stakes is too burdensome’, and prevents the balanced development of this market.”
It also mentioned that operators were taxed on “money they don’t receive”, since a lot of money staked is returned to players in the form of winnings.
France is home to a number of major iGaming operators, such as Betclic and William Hill.