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January 26, 2007

French law authorizes only the state-sponsored monopolies Francaise des Jeux and Pari Mutuel Urbain to operate remote gambling, in support of which two amendments targeting the unlicensed industry, which includes all foreign operators, have been tacked onto a controversial “delinquency prevention” measure introduced by conservative Interior Minister Nicholas Sarkozy after France’s 2005 riots.

The first amendment zeroes in on financial transactions and is aimed at “physical or moral persons involved in the organization of gambling, betting or lotteries prohibited by French law.” It will require banks to develop specific tools to prevent money transfers to and from gambling Web sites and to and from gamblers. Government will have the power to freeze such transactions and transfers for up to six months on a renewable basis.

The second amendment targets ISPs, requiring them to inform players seeking access to gambling sites that the sites have been designated “as reprehensible by the minister of the Interior” and informing them of the risks of participating in games that are operating “unlawfully.” ISPs could face fines up to 75,000 euros for non-compliance.

Deputy Philippe Houillon of the governing UMP and president of the National Assembly’s Committee of Laws told industry newsletter Journal des Casinos the measures allow “administrative authority to fight back more efficiently illegal activities of gambling and bets offered on the Internet.”

“At the moment, the struggle is led by the judiciary, since administrative authorities are missing effective means to participate,” he said. Town and Country Planning Minister Christian Estrosi said the legislation is part of a broad-based assault on illegal gambling that will include legal action, complaints to the CSA (the country’s broadcasting regulatory body), and creation of a high-tech surveillance agency to monitor remote gambling.

“On a European level, France will assert the necessity of coordination in fighting against illegal Web sites,” he said.

France already bans advertising and marketing by unlicensed operators, which include all current or would-be operators except Francaise des Jeux and PMU.

If the bill passes the National Assembly it will move to a joint commission of the Assembly and Senate. The bill will then return in final form for ratification in the Assembly.