France Looks to Modify 2020 GGR Tax Plan; Gambling Industry Affected

France is looking to introduce changes of GGR tax rate for the 2020 budget. From now on, the tax will be imposed on gross gaming revenues instead of gaming turnover. The Bill goes to National Assembly and expects to see amendments before turning in law.

More About Upcoming Changes

As part of amendments, France will move from the turnover tax model and introduce new tax rates on different gambling industries. Horse racing will be taxed with 19,9% of GGT and sports betting will be levied with 33.8%. Additionally, online poker will come with a 36.7% tax rate.

France plans to introduce further changes regarding social security payments. The new tax plan will also be based on revenues instead of turnover. As a result, horse racing will be charged with 6.8% of GGR while sports betting occasions will include a 10.7% rate. Online poker will come with a 4.1% tax rate and online sports betting will introduce a 10.7% rate.

If we take into consideration all taxes with the newly introduced GGR rate, casino operators will compensate 37.7% tax on horse racing occasions and retail sports betting will be charged with 44.5%. Additionally, online sports betting operators will pay 55.2% and online poker providers will contribute with a 40.8% rate.

Before the Amendments

Looking back on the previous regulation, gambling taxes were based on the money that customers wagered on the games. Some people would consider revenue-based taxes lower, with a single horse-racing rate of 13.2%. However, the revenue-based system will force bettors to wager more money.

The France Senate has released the statement:

“In recent years, several reports have highlighted the binding effect of the levy on players’ stakes and not on GGR. [Online gambling regulator] ARJEL thus notes, in its 2015-2016 activity report, that ‘the tax on stakes is too burdensome, and prevents the balanced development of this market.”

Over the previous period, the sports betting industry has turned in the profitable sector for France. Only during the third quarter, sports betting revenues of licensed operators increased 9% while reaching €1.08b. As for the GGR amount, it rose 44% reaching €214 million. At the same time, the average number of customers per week declined by 1% which was the first drop since 2017.

Source:

“France set to change GGR tax as part of 2020 budget“, Ad Miral, calvinayre.com, December 17, 2019.