Yet another expert is weighing in on what many feel is the exorbitant tax rate applied by the French government on online gambling websites under terms of the new French gambling law – and after crunching the numbers, it doesn’t look good.
Bodog Network vice president Jonas Odman recently crunched the numbers for the 11 companies now offering online poker sites in France, presumably in part because his company might be interested in joining the French market: Bodog did not apply in the first round of licensing.
The reality under the new law is that companies providing online poker must pay a tax of 2% on all pots and tournament buyins. Though 2% doesn’t sound like a lot, most online operators are now forced to pass on the additional expense to players or take a hit, and most providers of Internet gambling in France are doing the former. At Poker Stars, perhaps the largest poker room in French market, players recently held a three-hour protest in which players occupied seats but did not play, therefore giving Poker Stars no profit during that time.
Odman figures that passing on the 2% not only “turns most winning players into losing players,” but that the average player will actually play 26.8% fewer hands. The figures were based on computer simulations involving one million typical hands and the increased rake fees caused by the extra tax.
Today revenues on online gambling in France are experiencing rapid growth across the board against previous years, but much of this can be attributed to World Cup betting and an increase in citizens willing to play now that clear gambling laws are in place. It would seem, however, that this 2% tax rate is a ticking time bomb perhaps capable of shrinking the growth as rapidly as it ballooned up.