France’s Gambling industry faces an uncertain future with tax rises and iGaming regulation in the balance as Prime Minister Michel Barnier faces a budget showdown with opposition to pass critical balancing measures. 

Michel Barnier’s government could be the shortest-lived in France’s history as he faces a vote of no confidence that he is expected to lose this afternoon. The vote follows French MPs’ rejection of the 2025 Budget Barnier submitted on Monday.

Barnier pushed through his budget at the start of the week by using article 49.3 of the Constitution, but use of the ‘49.3’, as the French call it, also enables MPs to put forward a motion of censure in the government.

Both the hard left party La France Insoumise (LFI) and Marine Le Pen’s far right Rassemblement National (RN) have long called for a no confidence motion. LFI’s proposal is likely to be voted through with support from the RN and most of the Socialist Party.

France’s debt is nearly 6% of GDP, double the 3% allowed to EU Member States. Barnier’s budget sought to save €60bn through a mixture of tax rises on corporations and goods, and cuts to social services.

iCasino doubts and tax rises

For the online gambling sector, the main concerns revolve around the increased tax hike set to hit online sportsbooks from next April and the government’s working groups to study online casino regulations – the first of which took place yesterday and focused on addiction.

Both face uncertain futures if the government falls, but with online casino regulation now highly visible in the public sphere, keeping exchanges calm on what remains a sensitive subject will not be easy.

Rudderless

Should Barnier’s government fall, a new budget, as well as the social security budget, which incorporates the planned tax rises on groups like Unibet and Winamax, cannot be voted on until there is a new government. Should that be the case, the 2024 Budget will be adopted by a special legal mechanism.

France can not hold another set of parliamentary elections until July 2025 at the earliest following President Macron’s decision to call snap elections this summer. He will have to appoint a new cabinet should Barnier lose the confidence vote today.

In an op-ed for Les Échos, Nicolas Béraud, CEO of Betclic and President of the online gambling trade body AFJEL, said the tax rises planned in the social security budget were “an incomprehensible tax assault on online gaming”.

Structural harm

He added that while the government had spared land-based casinos and the lottery and retail betting monopolies of PMU and Française des Jeux, the tax hikes on OSB and poker operators would reach more than 70% of their GGR and endanger “the competitive structure that has been hard-built since 2010”.

The financial pressures would force smaller operators to cease trading and be even more of a boost to the illegal operators already targeting the market, he added.

“Such a decision could even amount to disguised State aid, designed to favour the historic monopoly of La Française des Jeux by exacerbating the tax distortion with its private competitors,” noted Béraud.

French chaos

France’s politics has been in a state of chaos since President Macron called a surprise election this summer. Marine Le Pen’s party won the most seats but the left wing bloc Nouveau Front Populaire has the most MPs. Both the RN and LFI want Macron to step down before the end of his presidential term in 2027.

Barnier was appointed PM on 5 September. Addressing the French parliament on Monday, he said he could not compromise with more demands from the RN and added: “Each one of us has to assume their responsibilities, and I’m taking mine.”

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