Updated: Dec. 15, 2010 (Initial publication: Dec. 15, 2010)
Bibliographic Reports : Symposiums
III-3.9 : The French Competition Authoritiy’s Symposium on regulating online gambling
On November 15, 2010, the Autorité de la Concurrence (the French Competition Authority) hosted a meeting on the theme of online gambling and the opening of the market to competition. The first debate concerned sports federations and betting rights.
FRENCH
Rapport bibliographique (Symposium): Symposium de l'Autorité de la Concurrence sur la régulation des jeux en ligne.
Le 15 novembre 2010, l'Autorité de la Concurrence a organisé un colloque sur le thème de la régulation des jeux en lignes et l'ouverture du marché à la concurrence. Le premier débat concernait les fédérations sportives et le droit au pari.
GERMAN
Bibliographischer Bericht (Symposium): Symposium der französischen Wettbewerbsbehörde über die Regulierung von Online-Wetten.
Am 15. November 2010 hat die Autorité de Concurrence (die französische Wettberwerbsbehörde) ein Symposium über die Regulierung von Online-Wetten und die Wettbewerseröffnung dieses Marktes veranstaltert. Im ersten Gespräch wurde das Thema Sportverbände und Wetterecht behandelt.
ITALIAN
Relazione bibliografica (Convegno): Il convegno dell’Autorità francese garante della concorrenza sulla regolazione delle scommesse on-line.
Il 15 novembre 2010, la Autorité de Concurrence (la Autorità francese garante della concorrenza) ospiterà un convegno sul tema delle scommesse on-line dell’apertura del mercato alla libera concorrenza. Il dibattito porterà sulle federazioni sportive e sul diritto a scommettere.
SPANISH
Informe bibliográfico (Simposio): El Simposio francés de la Autoridad de la competencia sobre la regulación del juego en la red.
El 15 de noviembre del 2010, la Autorité de la Concurrence (la Autoridad francesa de la competencia) organizó una reunión sobre el tema del juego en la red y el abrimiento de este mercado a la competencia. El primer debate se centraba en las federaciones deportivas y los derechos de juego.
CHINESE
书目报告（专题论丛）：法国竞争监管机构对于网络游戏监管的讨论。
2010年11月15日，Autorité de la Concurrence（法国反垄断机构竞争事务监察总署）举办了一场以网络游戏监管及开放市场竞争为主题的研讨会。第一期讨论内容涉及与体育协会和赌博活动及其相关权利。
Attached documents
Anne Perrot, Vice-President of the French Competition Authority noted that this issue is a classic issue in terms of regulation, and that the Competition Authority is familiar with it. Indeed, this Authority must study whether or not, on this newly opened market, barriers to entry exist. The study of the market of online gambling covers two questions: first, concerning the vertical integration, some operators such as the PMU (Paris Mutuel Urbain, the former French monopoly on horse betting) are in the meantime betting operators and competitions' organisers: this raises classical problematic of debarment. As for the horizontal integration of the market, the question bears on whether or not the presence on both the online gambling market and the physical gambling market represents a significant advantage.
Patrick Spilliaert, the other Vice-President of the French Competition Authority, also underlined that the Competition Authority already accompanied the liberalisation of somehow similar markets such as electricity or transports, and therefore already has a certain knowledge and general competence on this subject. He quoted some of the questions that can fall into the Authority's prerogatives: are they significant differences in the markets? Is the access to information in horse betting efficient?
Emmanuel de Rohan-Chabot, Chief Executive of Zeturf France, explained how horse betting functions. The bets are mutualised, so the winner wins what the others lose. Therefore, the more the bets are complex, the more there are winning combinations, so the more the operators need liquidity to be able to pay the winners. So the operator, which attracts a significant volume of money, is likely to be able to propose more complex bets, and to again attract a larger number of customers. So, between the lines, former monopolies, which combine an online activity with a very important and stable offline business gather much more liquidity than new online incomers which can not compete on the offline market. It is all the more relevant that consumers do not expect the same outcome from simple bets than from complex ones. They often expect some regular gain for simple bets, whereas complex ones, because of the variety of winning combinations and the high amount of money they can provide, are not expected to pay back this often. So because they can afford to offer complex bets (such as the Quinté Plus, a very popular complex bet issued by the PMU), and have the money put into these bets, former monopolies can increase the remuneration of their simple bets, and thus overtake important shares of the market.
M. de Rohan-Chabot also noted that in the determination of the list of races opened to betting, the Ministry for Agriculture consults two parent companies of the PMU. There could be a conflict of interest for these societies since because of their closeness to the former monopoly of horse betting, they could influence the Ministry in such a way that the list would favour the PMU.
The General Secretary of the PMU, Pierre Pagès, logically contested these attacks. He first reasserted that on the sectors of poker and sport betting, the PMU is a newcomer. Also, 60% of the agreements delivered by the ARJEL since May 2010 have been attributed to companies that already were active, most of them for five or more years. So in a way, the PMU is really new on the market, and the market was already competitive. He also pointed out that before the legalisation of these companies, they did not have to submit to French tax system, and the PMU was heavily disadvantaged. On the argument of the available liquidity, he argued that the importance of the amount of money is not relevant, since what really counts is the number of gained bets as a percentage of the amount. Also, the range of PMU bets is limited, and in his view, what really differentiate competitors are the services offered in addition to bets. This is on what competitors communicate and attract customers, and he believes that the PMU does not stand in a privileged position at all. And concerning the fact that the PMU can both organise a race and offer bets on it, the law imposes a separate accountability, and the PMU does it.
Antonio Costanzo, Public Affairs and Regulated Markets at Bwin,opened the debate to other forms of betting. He stated that the global online market represents 10% of the gambling market, and much less at a French level. The rest of the market is offline, shared between casinos and offline bets, exclusively provided by former monopolies. These companies have a strong advantage on their online competitors, since they can use their distribution networks to promote their online products and benefit form their implantation to attract customers. Also, they can mutualise their organisation between online and offline activities. And finally, because of the possible mutualisation of the mass of money they gather online and offline, they can offer much higher rewards.
Charles Lantieri, Assistant General Manager of the Française des Jeux, was mainly in line with the arguments of M. Pagès. His company is also both a former monopoly and a newcomer. He completed the argument according to which the recently legalised operators were in a very favorable position before May 2010, fiscally and technically, since they could propose live betting products, what the Française des Jeux could not do. Also, they offered 6.000 bets per week while the Française des Jeunx could only offer 100 bets online. So the former monopolistic operators, on the online betting market, are not the former offline monopolies but much more those who dominated the market before the May 2010 Act. The fame of certain brands can account for that.
Anne Perrot noted that the fame of brands is an argument that already played an important role in the liberalisation of the electricity market, where the former monopolistic firm, EDF, could use its reputation and image to keep its consumers. She also noted that there is a fear that online betting activities would lead to the progressive destruction of physical selling points of offline betting activities.
Jean-François Villotte, President of the ARJEL, added some information on the competencies of the ARJEL, stating that each of the authorities - the Competition Authority and the ARJEL - have distinct and complementary competences, and that they work in close cooperation.
Following this brief intervention, Anne Perrot stated that on the issue of liberalisation of online gambling, the Competition Authority will apply a transversal method of reflexion, including vertical issues - such as the right to bet - and horizontal ones - the question of the competition between the former monopoly and the newcomers. The real specificity of this market is that it combines several issues of public interest, which make it partly restive to sole competitive reasoning. She quoted the example of the fight against addiction, which contradicts a competitive logic. So the Competition Authority will treat this market combining both transversal and specific approaches.
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