EUROPEAN COMMISSION
PRESS RELEASE
Brussels, 19 June 2013
State aid: Commission approves French proposal for a
parafiscal levy on online horse-race betting
The European Commission has approved a French proposal for a parafiscal levy on online
horse-race betting to finance horse-racing companies. The changes made to the proposal
by the French authorities after the opening of the Commission investigation ensure fair
competition between horse-race betting operators.
As part of the opening-up to competition of online horse-race betting, France notified the
Commission of a proposal for a parafiscal levy of 8% on stakes from this betting in order
to finance a service to improve the bloodline and promote horse-breeding, which would be
entrusted to horse-racing companies. France considered this service to be a service of
general economic interest (SGEI).
In 2010 the Commission opened a detailed investigation because it had doubts about
whether the task entrusted to horse-racing companies could be classified as an SGEI. As a
result of the investigation, the French authorities submitted an amended proposal to the
Commission.
The new scheme comprises assistance to the horse-racing sector, based on the common
interest that the PMU (Pari Mutuel Urbain) and the competing operators of online
horse-race betting attach to the organisation of horse races on which bets are taken. Only
the costs directly associated with the organisation of these races enter into the calculation
of the level of the levy. This approach reduces the levy to approximately 5.6% from the
8% originally planned.
The Commission takes the view that the new scheme is compatible with the internal
market under the exception provided for in Article 107(3)(c) of the Treaty on the
Functioning of the European Union (TFEU), which authorises aid to facilitate the
development of certain economic activities, subject to certain conditions. The Commission
has authorised a number of measures of the same type, funded by a tax on companies in
a given sector, and intended to finance joint activities carried out for the benefit of the
sector as a whole. The Commission also takes the view that, by spreading the burden of
financing races equitably between the different operators, the measure allows fair
competition between these operators in the newly liberalised market for online horse-race
betting.
The authorisation of the measure is also based on the specific commitments by the French
authorities to ensure that there is no excessive increase in the costs in the common
interest and that the contribution from ‘bricks and mortar’ PMU bets to the funding of
horse races is at least equal to that asked from the operators of online betting. Lastly, the
French authorities have undertaken to provide an implementation report to the
Commission two years after the entry into force of the new measure, which is scheduled
for 1 January 2014.
IP/13/568
Background
Before horse-race betting was opened up to competition, the monopoly was held by the
PMU (Pari Mutuel Urbain), which is an economic interest grouping formed by two
horse-racing parent companies and 49 regional racing companies. In 2010, the
horse-racing bets placed with the PMU, the leading totalisator operator in Europe and the
second-largest in the world, were worth EUR 9 342 million. The PMU’s net income, which
came to EUR 790.9 million in 2010, finances 80% of the horse sector (breeding, training
centres, equestrian centres, etc.), which employs some 74 000 people and is present
throughout France with a total of 250 racecourses.
In June 2010 France opened online horse-race betting to competition, thus ending the
PMU’s monopoly.
A non-confidential version of today's decision will be made available under case number
SA.30753 in the State Aid Register on the DG Competition website once any confidentiality
issues have been resolved. The electronic newsletter State Aid Weekly e-News lists the
most recent decisions on state aid published in the Official Journal and on the website.
Contacts :
Antoine Colombani (+32 2 297 45 13, Twitter: @ECspokesAntoine )
Maria Madrid Pina (+32 2 295 45 30)
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