Reveillez-vous, mes amis

Should we be laughing or crying at the news that the French sports betting market has seen a 26.5% quarter-on-quarter fall in the first three months of 2011? And the same question might be asked of the explanations given first by the French newspaper Le Figaro (that a lack of a major sporting event contributed to the decline), and second by the French regulator ARJEL (which stressed that the French market only opened in May so there is no direct point of comparison from Q1 2010).

Are these credible explanations, or is it more likely, as has been or could be pointed out by anyone with a passing knowledge of betting, that introducing prohibitively high taxes serves only to shift business away from the legal and regulated market and into the illegal and unregulated one?

If the lack of a major sporting event has contributed to the decline, how come no operator in a jurisdiction with a sensible tax structure has suffered a decline of this kind? What was the major sporting event of the previous quarter that I missed? Was there a World Cup that I didn’t see happen? And why is a year-on-year comparison necessary to assess that these are disastrous results? Is the implication that this kind of decline happens between Q4 and Q1 every year; and if so, how come it’s never been true anywhere else in the world? Isn’t the reality that in the vast majority of betting businesses worldwide, Q1 and Q4 are the two strongest quarters of the year?

One would hope that the Germans, who since I last wrote have come out with a plan for an even more absurd turnover tax guaranteed to create an enormous black market, will look at this and consider the folly of what they are mooting. Because there should be no mistake: this is almost certainly not a 26.5% quarter-on-quarter fall in sports market betting, but a 26.5% quarter-on-quarter shift in sports betting from the legal to the illegal market which is as depressing as it was predictable.

This is yet further evidence, piled upon evidence, of just how bad the French gambling legislation is.  The aim should be to create an environment where people can pursue a valid leisure pastime without its existence creating peripheral problems, and to bring as much betting into a licensed environment as possible in order to protect the vulnerable and safeguard sport.

As I have explained before, once people are lost to the black market, it is extremely difficult to coax them back; and yet it’s there for all to see that the French law is driving people to the black market in droves. We can only hope that the French wake up, and that the Germans stop sleep-walking behind them, before further damage is done.