On November 21, the French Senate approved tax hikes across a variety of industries, including gambling. While the country was indecisive about a gambling tax hike earlier this year, it seems like it will be happening after all.
The tax changes are a part of the final version of France’s social security budget and align with an overall strategy to raise the tax rates of high profit margin sectors to tackle public deficits. In addition to gambling, these sectors include sellers of tobacco products and sweetened beverages – two other industries often associated with the decline in public health.
Lawmakers, however, refrained from introducing a higher tax on the alcohol industry.
What Does That Mean for Gambling?
As mentioned, France seemed indecisive about a tax hike on gambling, giving the industry a breather. As a result, the sudden decision implement one is a slap for industry stakeholders who were convinced that gambling would have gotten off lightly.
French operators already pay a huge tax, giving approximately 55% of their gross gaming revenue to the country. The new raises will vary depending on the vertical but will add to the already significant tax burdens. Horse racing will not see a tax hike implemented as lawmakers agreed with the industry’s concerns.
The higher gambling taxes would add approximately EUR 50 million to the state budget, experts predict.
What Do People Think?
The surprise gambling tax hike was, as one might expect, met with mixed reactions. The industry was largely dismayed at the change, echoing previous concerns about the market’s integrity.
According to industry stakeholders, a gambling tax hike could undermine the legal industry in more than one way, potentially giving more power to unlicensed gambling operators. In addition, it might have an unintended negative effect on the sports sector, which relies on the sports betting industry.
There were, of course, also those who rejoiced at the last-minute change in heart. The proponents of the higher tax argued that the gambling industry has been very successful and is the perfect target for a tax hike. Senator Thomas Dossus went a step further, slamming online operators as “parasites” that make the world toxic.
