France’s new Prime Minister, Michel Barnier, has caused a stir in the gambling industry with his government’s plans to impose higher social security taxes on gambling firms. This move, announced by the administration on Thursday, has sent online sportsbooks, horse racing sites, retail lottery providers, online poker companies, and retail casinos scrambling to prepare for the financial hit. The proposed tax hikes are expected to have a significant impact on the sector, including online operators’ marketing spend.
The trade body representing France’s 200 land-based casinos, Casinos de France, has expressed concern over the proposed tax increases, stating that they will place a heavy burden on the already heavily taxed sector in Europe. The organization warned that the planned 10% gross gaming revenue tax on Paris gaming establishments could potentially threaten 45,000 jobs and lead to the demise of many businesses.
According to reports from Les Echos, the tax increases proposed by Barnier’s government are projected to generate €1.6 billion ($1.75 billion) in revenue annually, with €400 million ($438 million) earmarked for family health and social care provision funds. The new tax measures could be introduced through primary legislation or amendments during parliamentary budget debates.
Currently, gambling firms in France pay a social contribution tax based on a percentage of their gross gaming revenue (GGR). Online sports betting and retail slot machine operators currently pay a 10.6% social contribution tax, while the lottery, horse racing operators, and brick-and-mortar sports betting firms pay different rates. Under the proposed new social levy hikes, taxes on online sports betting would increase to 15%, retail horseracing to 10%, and lotteries and casinos to 9.2%. Additionally, Paris-based gaming establishments, known as cercles de jeux, will now be required to contribute 10% of their GGR towards social security taxes.
Casinos de France has strongly opposed the tax hikes, arguing that the gambling sector already contributes over €1.5 billion ($1.6 billion) in taxes annually to government coffers and local communities. The organization warned that the proposed tax increases could jeopardize tens of thousands of jobs and have a detrimental impact on Paris gaming establishments. Grégory Rabuel, President of Casinos de France and CEO of Barrière Groupe, criticized the government’s decision, stating that the additional taxation would worsen an already challenging situation for the industry, which is already burdened with high tax rates compared to other European countries.
In conclusion, the gambling industry in France is facing uncertainty and financial strain as a result of the government’s proposed tax hikes on gambling firms. The sector, already heavily taxed, is bracing for the impact of the increased social security taxes, which could threaten jobs and put businesses at risk. As the government moves forward with its plans to raise taxes on the gambling industry, stakeholders are closely monitoring the situation and preparing for potential challenges ahead.