“The new French legislation on
online gambling in European
perspective”
Fabienne Péraldi Leneuf
Professor, University of Lille North of France
The organisation of gaming
and betting in France

General principle of prohibition since
XIXth century linked to the dangers
games represented (two laws: 21 may 1836 and
2 june 1891)
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Derogations:
- For small-range gaming (local events)
- For appropriation of funds to « noble »
causes (culture - tourism - veterans)
Derogations for a monopolistic
organisation
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Horse race betting (1st authorisation in 1930)
• Pari-mutuel
• Exclusion of fixed-odds betting / with the pari-mutuel, the
participants bet mutually one against the other whereas with
the “à la cote” betting each participant stakes separately
against the operator who takes a risk according to a
quotation previously fixed with the gambler.
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Lotteries and sport betting (1st authorisation in 1933)
• Promotional lotteries and gambling realised on the occasion
of promotional sales are forbidden.
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Casino gaming (1st authorisation in 1907), slot
machines, table games, roulette
Exclusion of other games
The monopolistic operators:
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PMU (GIE): horse betting outside the hippodromes.
The CE decided in 1979 that this was not a public
service.
FDJ (française des jeux): SEM (1978 decree)
constituted as a limited company (SA). The State
holds 72% of the shares. Lottery and sport betting.
Not a public service (CE Rolin 27 October 1999)
Casinos (private companies). Concessions of public
service (CE ville de Royan 25 march 1966) as they
contribute to the cultural activities of French
municipalities.
The regime of the authorised
monopolies
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1. The FDJ:
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A 30 years convention since January 1979 between the FDJ
and the Ministry of Budget provides the way to accomplish
the mission given to the company
• Half of the Board of directors consists of State’s
representatives.
• The chairman, who establishes the rules of the games, is
nominated by a presidential decree on proposal of the
Board of directors.
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Art. 17 2006 decree: FDJ SA the articles of association are
approved by the Minister of Budget. An order of Feb. 22nd 2006
provides new conditions for FDJ’s mission concerning its new
games, actions dealing with the information of gamblers, addiction,
minors’ (16 years old) information. Creation of an advisory
committee for the implementation of a gaming supervision policy
and responsible gaming.
The regime of the authorised
monopolies
 2. The PMU
 Special authorisation to organise pari-mutuel
betting granted by the Ministry of Agriculture
for a year (law of April 16th 1930)
 3.
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Casinos:
The duration of the concession is freely fixed by the
terms of reference according to a law (Loi Sapin). An
order of May 9, 1997 fixed it to 18 years. The
Ministère de l’Intérieur (Home Office) decides bit by
bit, of each authorisation's duration.
Organisation of monopolies:
conclusion
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Each time: specifications and rules published in
the JORF (French government publication giving
information to the public about new laws).
A fixed duration except for FDJ
Deductions (but not tax) credited to the State’s
budget but without any parliamentary control.
Some obligations:
• An economical and financial control by the State and by
the Finances General Inspection and by the Cour des
Comptes (Audit Office).
Justifications of monopolies
 A late
writing down of the
justifications linked to public order.
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Case law: CE 15 may 2000 - confédération des
professionnels en jeux automatiques: recognised
that it was a “reason of general interest” linked to
the protection of public order that justified the
lottery monopoly because it was a way to limit
and to control public order.
Two decrees n°2006-174 and n°2006175 of 17 Feb 2006
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dealing with the organisation and operation of lotteries
and sports betting, they precise the pursued objectives :
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“to guarantee the integrity, the security and the realibility of
gambling operations and to watch over the transparency of their
operation;
To direct the gambling demand into a system controlled by the
public authority in order to prevent the risks of a fraudulent and
criminal exploitation of gambling and to fight against money
laundering;
To supervise gambling consumption in order to prevent the
development of addiction;
To watch over not to encourage the under 16 years old to play”.
Justifications due to Community
law
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Article 46: derogations to the Freedom to Provide
Services (FPS) admitted for restrictions founded on
nationality or residence.
Justifications established by the ECJ for non
discriminatory restrictions :
• The reasons of general interest
• Public order and public security: fight against crime and
money laundering
• Social order: preventing citizens from fraud and from
encouragement to spend excessive sums on gambling
services or necessity to prevent disturbances to social
order.
• Gamblers’ direction, genuinely reducing gambling
occasions,
• Impossibility to justify a public service.
Uncertainty in Community law

Lack of harmonised legislation
(impossibility)
Exclusion of gambling by Services Directive
 Exclusion by the Information Society
Directive
 Soft law: a code of conduct for sports
forecasts?
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The ECJ: the sole regulator
The foundation of its intervention: art. 49
 A careful control :
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• Proportionality principle:
• Justifications must be suitable to attain the alleged
public interest
• Proportionate to the objective
• Non-discriminatory
The doubts of French judges in
numerous conflicts

The Zeturf case
Cour de cassation: ruling of 10 July 2007
 CE: ruling of 9 May 2008
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An uncertain Community
context
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Position of the European Commission :
deregulation and reasoned opinion against
France:
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Invites French authorities to take into account when evaluating the
application for a licence the requirements to which the operators are
already submitted in their own country (nothing in the law for the
moment…)
Also insists on the fact that the fixation of the return rate to the
gamblers, art. 8 of the bill, is likely to constitute an infringement of the
freedom to provide services.
The contrary position of the ECJ :
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Opinion of advocate general Yves Bot delivered on
14 oct. 2008
Santa Casa Case delivered on 8 sept. 2009
13 october 2009: The French
bill
The opening to competition and to
regulation of online gambling:
«a restrained liberalization »
Liberalization (opening to
competition):
Three domains concerned in France
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Sports betting
Horse race betting - pari-mutuel and fixed-odds
Online poker
Exclusions :
• Instant lotteries (“jeux de tirage et de grattage”): FDJ’s
monopoly is unchanged.
• Slot machines are not authorised online
Regulation

« structuring principles »(1)
• Justifications of general interest
• 1st Article. The State policy concerning gambling aims to limit
and delimit the offer and consumption of games and to control
their operation so as to :
• 1ｰ Prevent addiction and protect minors
• 2ｰ Guarantee the integrity, the reliability and the
transparency of gambling operations;
• 3ｰ Prevent fraudulent and criminal activities and money
laundering ;
• 4ｰ (new) Watch over a balanced and fair development of
the different types of games in order to avoid any
economical destabilization of the concerned sectors.
“Structuring principles” (2)
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The authorisation of operators of online gambling, the ARJEL
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Terms of reference are defined by the regulatory power
Given for 5 years
Exclusion of non-European operators or those who have not
ratified a tax convention with a provision of administrative
assistance in order to fight against fraud and tax evasion
Organisation of auditing procedure
Advertising is controlled
Traceability of the operators, of the operations and
preservation of the gambling data
Supervision of the stakes paid back
Banning of sponsorship and conflicts of interest
Taxation of the operators for the needs of general interest.
“Structuring principles” (3)
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A regulatory body the Arjel: an independent government
agency with regulatory powers (AAI)
Composition
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A board (“Collège”) of seven members
A sanction committee
An advisory committee
ARJEL’s missions
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To guard the respect of the missions in the general interest
Could propose provisions for the terms of reference (cahier des
charges)
Opinions, legislative and regulatory propositions on the gambling
sector
Authorises the operators
Fixes the technical characteristics of the platform and software and
homologates them
Controls the rules of the games drafted by the operators
Supervision of online gambling and cooperation with other regulators
Controls free competition
• Investigation concerning abuse of dominant position
• Refers to the competition Counsel (conseil de la concurrence)
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Sanctions
• Inquiry, audition.
• Penalties
Remaining juridical problems
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Legitimacy of the limitation of the licences
Interpretation of the consistency principle:
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Which hierarchy of priorities between:
• Exclusive rights and expansion