France’s Online Poker Industry Continues Decline In Q4 2014

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Monday, February 9th, 2015 | Written by Shane Larson

France’s online poker industry has steadily been declining since the game was first regulated back in 2010, and the latest results released for Q4 of 2014 proves no exception with internet poker revenues falling by €17.3 million compared to the previous quarter, with cash games lower by €23.8 million, but tournament noting a slight uptick of €6.5 million.

Cash Game Revenues Down 12% in Q4

In Q4, online poker stakes declined by 12% to €1 billion compared to the €1.2 billion recorded in the same period of 2013, with results taken over the past three years revealing annual stakes have now plummeted by 33% to €4.3 billion from the €5 billion taken in 2013. Helping to explain some of the decline in France’s online cash game action was the the exit of PokerStars.fr and Winamax.fr from the UK online poker market, following the introduction of new gambling and tax laws which would have seen them double taxed for continuing their operations in Britain and France at the same time.

Another reason has to do with the increasing interest noted for online poker tournaments , which offers recreational players more bag for their buck, and as pokerstratgy.fr journalist Antoine Lafond, explains: “When a new player sits down at a cash game table he or she is greeted by a table of good players. Beginners have fewer opportunities to progress. Their shelf life is not that long. However, when they play tournaments they can stay in the game longer. It seems like they are getting more value for money.”

Tournament Appeals More To Amateurs

With the shark infested waters of online cash games continuing to scare recreational players away from their virtual felts, online poker marketeers now devote most of their advertising efforts towards tournament play, leading to the inverse relationship currently seen between the two formats. Exploiting this situation further, poker operators have been enjoying great success from the lottery-style poker games that have become a hit amongst recreational players, such as Winamax’s Expresso Poker introduced in the summer of 2013, and PokerStars.fr’ Spin & Go’s in September 2014. As Antoine Lafond, explains:

“It’s more fun and they retain hope that they can win bigger prize pools in a shorter space of time.”

One thing these lottery-style poker games do not appear able to do, however, is attract new players to the poker sites, with online traffic having fallen by 4% in Q4, and by 10% over the last year.

High Taxation Driving Players Away

Another significant factor contributing to the high volume of players exiting France’s online poker market is the country’s lack of a liquidity sharing agreement with other markets in Europe, as well as the huge tax burden placed on poker operators, and the impact it then has on their players. As a result, hundreds of France’s top online grinders have now moved abroad in order to continue plying their trade, in the process taking a huge toll on the finances of France’s poker sites. As pokerstratgy.fr journalist Antoine Lafond, explains:

“For me the starting point of this fall lies with the disproportionate taxation that’s applied to online poker operators. The high taxation leads to different choices. Marketing is directed at promotions that can bring in more revenue, and VIP programs are adjusted to recompense some of the losses.”

Sports Betting Propping Up The Industry

While French online gaming regulator ARJEL has underplayed the importance of online poker to the country’s online gambling industry, and dismissed the game as a “fad” and “too complicated” for a younger audience, online sports betting continues to prop up revenues for the whole industry. In the fourth quarter of 2014, for instance, quarterly betting stakes rose to €322 million from the €264 million for the same quarter in 2013, with annual stakes also rising to €1.1 billion from €848 million in 2013. While Q4 online sports betting profits stayed the same at €54 million, annual profits were up an impressive 38% to €227 million, compared to €164 million for the whole of 2013.

Unsurprisingly, the country’s most popular sport for online wagering was soccer (64%), followed by basketball (15%), then tennis (9%). Similarly impressive was the increase in overall participation in sports betting, with active player accounts soaring by 36% to 1.142m last year, from 842,000 in 2013.