French Online Poker Market Continues To Slide In Q1 2014

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Wednesday, April 16th, 2014 | Written by Stephen Smith

On April 14th, France’s independent online gambling regulator (ARJEL) published its report on the state of the country’s online gambling market for the 1st quarter of 2014. According to the latest figures, France’s online poker industry shrunk by 10% to €65 million during the first three months of this year, compared to the €72 million reported for Q1 2013. Following the news, ARJEL predicted the country’s regulated poker operators would likely experience “considerable losses for yet another quarter.”

Regulated poker attracting less and less players

France legalized online gambling in 2010, but within a year the market began contracting and in 2013 the French online poker market reported a 13% fall in revenues to €258 million compared to the €297 million generated in 2012.

This year, too, has got off to a shaky start with ARJEL’s latest report showing active player accounts have fallen by 12% compared to the same period last year. Online cash games have experienced a particularly sharp decline in action, with bets down by 19% for Q1 and lower by 28% compared to 2012. In total, cash game bets contracted to €1.2 million in Q1 from the €1.476 million recorded in the same quarter last year.

On a more positive note, poker tournaments saw a 9% surge in total buy-ins to €407 million compared to €375 million in Q1 2013. However, cash and tournaments combined still points to a drop in the country’s online poker market overall, with revenues down by 10% to €65 million

In terms of other online gambling activities, France’s horse betting industry reported its first major drop off in the 1st quarter of 2014, down 12% to €269 million, compared to €305 million in Q1 2013. The country’s sports betting market, however, was in good shape and saw a 25% increase in revenues to €254 million mostly thanks to betting on soccer games.

Is online poker still popular in France?

Between Q1 2013 and Q1 2014, the total number of active online poker players in France appears to have fallen by 12% from 299,000 last year to 263,000 in 2014. At first glance ARJEL’s latest finding would seem to indicate a waning appetite for online poker in France. Nevertheless, a truer picture of the state of France’s poker market would include the fact that around 47% of the country’s online poker players prefer to gamble on unlicensed European-friendly websites rather than their own highly taxed and tightly controlled sites.

Unregulated sites a major drain on the domestic market

Naturally, the amount of players taking their business to unlicensed, offshore operators represents a significant drain on the country’s online poker industry. Nonetheless, the dire situation is seen as a failing by the country to develop a viable, regulated market, with former ARJEL President Jean-François Vilotte, previously warning:

“Poker is going through a difficult time, but this is not something that is happening only in France, as Spain and Italy are experiencing a similar trend as well. Seen from a broader perspective, this is a problem of legalized markets competing against non-legalized ones. If legalized markets won’t learn how to become more flexible and adjust themselves quicker to what people want, they will keep doing the work for illegal websites and help them to win against their legal competitors.”

France rejects pooled player liquidity

ARJEL latest report showing further contraction in its online poker market comes as little surprise to those websites operating in the French online poker market. For years, industry experts have been calling for a change in the country’s gambling laws to allow France to share its player pool with other EU markets, including Italy and Spain. Despite the obvious need for an overhaul, however, the French parliament ruled against ARJEL’s player sharing proposal, with the Rapporteur of the Committee on Economic Affairs, Razzy Hammadi, warning that a shared European player pool would soon develop into “an uncontrollable ogre eating one market after the other.”

The approach taken by the French parliament flies in the face of advise given by former ARJEL president Jean-Francois Vilotte, who before departing from his post, stated:

“We have to pay attention to three things: First, that there is a sufficient number of games to be played, as the current regulation allows only Texas hold’em and Omaha. Second, that we carefully think about the liquidity aspect, especially if it refers to a single country. And third, taxation.”

Instead of heeding his advise, ARJEL’s latest tactic has been to promote France’s regulated poker sites by launching a rather weak public awareness campaign emphasizing the risks of gambling on unlicensed sites. As the campaign states:

“You have only to lose when you play on non-ARJEL regulated websites.”