Stéphane Courbit is the chairman of BetClic Everest Group (formerly Mangas Gaming). He’s also our metaphorical stand-in for Sarah Connor in the original Terminator movie. In Courbit’s nightmarish vision, the cold, impersonal and relentless machine intent on destroying Courbit (and his company) is a French gaming regulator. According to Courbit, French gaming law “does not allow us to exist.”
Courbit made this observation in a recent tête à tête with French newspaper Le Figaro. While he was careful to preface his remarks with praise for the French government for taking this bold step toward slightly less protectionism, Courbit swiftly got down to business. Specifically, how ‘the worst online gambling laws in Europe” were killing his business. The business in which Courbit owns a 50% stake.
Courbit pulled no punches, saying France’s “absurd” execution of its liberalization scheme means that even a native French company like BetClic “cannot afford to live in its home market.” Operators are “overtaxed” and “the rate of return to players is too low.” These sentiments have previously been voiced at gaming conferences, but now Courbit is taking his complaints to the broader French public.
In addition to steep taxes and lousy return rates, “the scope of authorized gambling is too limited.” Courbit takes issue with what he sees as advantages maintained by former duopoly providers Française Des Jeux (FDJ) and Pari-Mutuel Urbain (PMU) in the areas of lotteries and horse betting. In August, it was predicted predicted that those two companies would be the only ones who found the new regulatory climate habitable.
So what went so wrong? Things started off well enough when the system launched in June of this year, with Courbit’s company signing up 10,000+ customers every day. But when the World Cup was finished, those newly signed-up customers started signing off in droves, soured by a max. 85% return rate; a rude awakening given that 96% is considered equitable outside the French bubble.
To Courbit, and the majority of French licensees, this exodus of players seems to have come as something of a surprise. “We did not imagine how disappointing this would be for French players.” We guess Bodog Network’s VP Jonas Ödman has a more vivid imagination than Courbit. Way back in July, Ödman crunched the numbers as they affected poker operations and found that the financial toll placed on companies (and subsequently passed on to the consumer) would ultimately result in less entertainment for the player’s betting dollar.
Ödman’s research showed that under French regulations, the average poker player’s experience would be shortened by 26.8%. If your plan is to provide a customer with less value than he’s conditioned to receiving, the only way you’ll hold on to that customer is if you’re the only game in town. Which (let’s be honest) was the plan, only it hasn’t worked out that way.
Courbit says the current French gaming law “favors fraud” because French players “do not hesitate” to seek out prominent international operators that chose not to sign on France’s dotted line. Despite French regulator ARJEL’s attempts to erect a digital border fence to block French players from accessing foreign sites, Courbit’s own info suggests these international operators account for 70% of the current French market. Small wonder, as most of these companies are reputable names operating perfectly legally just outside French borders, and offering punters real market rates of return.
Courbit doesn’t blame the understaffed ARJEL for being unable to stem this tide. Instead, Courbit believes ARJEL needs to take on the scope and attitude of the anti-gambling factions in China, where “40,000 Chinese employees constantly monitor the internet.” So that’s 40k more employees on the public tit AND curbs on freedoms? Where do I sign?
Yet despite China’s anti-gambling cyber army, here again, it’s the public companies that are being impacted the most. Hamstrung by their responsibility to avoid involving their shareholders in anything that might earn the ire of another country’s censors, public companies are left standing on the sidelines while their privately held competitors gobble up market share. Local private companies like 12Bet do huge business across Asia yet still manage to get their logos onto major European football squads’ jerseys. Best of both worlds? You 12Bet.
So is Ödman a psychic? Will a crystal ball plunk down on the felts at another live poker tournament appearance and read fortunes while the cards are being shuffled? Or did this gaming industry veteran simply analyze the rules of the game and then exercise common sense, as most of the French players seem to have done, albeit only after getting some painful hands-on experience?
Bottom line, regulation only works when it creates a level playing field and suits the best interests of customers. The French scheme did neither of these things, which is why it is failing so miserably. French regulations seem to have been principally designed to give the appearance of adhering to European Union edicts on open markets while simultaneously protecting the interests of its existing state gaming monopolies. It never ceases to amaze us that countries that loudly proclaim their love of capitalism act as if the same freedoms enjoyed by other industries should be denied to the online gaming sector. You can have your gateau or you can eat it, but as French licensees are discovering, you can’t have both.
