EC okays French online horserace levy, extends Greek standstill period

france-greece-ecThe European Commission has given thumbs-up to a French plan to impose a 5.6% levy on online horseracing wagers. France originally notified the EC of its proposed levy following the June 2010 decision to end the country’s horserace betting monopoly held by Pari Mutuel Urbain (PMU), the continent’s largest tote betting operator. France’s equine industry, which employs 74k individuals, derived 80% of its funding from PMU’s operations.

France claimed the right to impose an 8% turnover levy due to its declaration of the horseracing industry as a service of general economic interest (SGEI), but the EC wasn’t convinced, prompting France to submit a revised plan that based the levy on only those costs directly associated with the organization of races, which reduced the rate to 5.6%. France also agreed to ensure that the contribution from PMU’s retail operations equaled that paid by online operators. The levy will take effect on Jan. 1, 2014 and France has been tasked with providing an implementation report two years after that date.

The EC’s decision is being viewed with suspicion by the Remote Gambling Association (RGA) and the European Gaming & Betting Association (EGBA). The two industry lobby groups released a statement questioning France’s motives, noting that in 2010, the stated rationale behind the levy was the perceived threat online race wagering posed to the sport’s revenues. However, online horse wagers rose 9% between 2011 and 2012, while PMU’s stakes rose 11.1% over the same period. The RGA and EGBA point out that levies can only be justified “if they are truly serving common interest objectives.” EC law does not permit “funds being extracted by law from one industry and transferred to another industry for commercial or quasi-commercial purposes.” The RGA and EGBA say their stakeholders will continue to review the decision.

Last month, the RGA and EGBA filed a fresh complaint with the EC over Greece’s proposed gambling law changes that would restrict online sports betting and random-number-generated casino games to former state-owned monopoly OPAP. Greece’s first attempt at amending its gambling laws was struck down by the Court of Justice for the European Union (CJEU) in January, so Greece submitted a revised plan in March, triggering a three-month standstill period that was set to expire on Friday (21). The EC has now extended that period by another month following the issuing of its own opinion, the contents of which have yet to be made public.