Sports betting drives French igaming growth in 2018

18 February 2019

France’s online gaming market reported year-on-year growth across all three legal verticals in 2018, with the sports betting vertical the standout performer, while the country's igaming regulator has suggested that support for a shift to a revenue-based tax may be growing.

Revenue for 2018 grew 25% year-on-year to €1.2bn (£1.1bn/$1.4bn), with the €691m contribution from sports betting larger than the contribution from horse racing betting and poker combined. Players wagered €11.4bn across all products, up 24% from the prior year.

Poker rake for cash games and tournaments grew 5% to €258m, while revenue from horse racing betting was also up 5%, to €256m.

The country’s igaming regulator L’Autorité de régulation des jeux en ligne (ARJEL) said that despite strong full-year figures the market was still relatively fragile as a result of marginal growth in poker and horse racing betting. To remedy this, it suggested that France could reform its igaming tax rate, with plans to shift to a revenue-, rather than turnover-based, tax on sports betting currently being discussed in the French legislature. The regulator noted that this would bring France in line with its European partners.

ARJEL estimated that around 2.7m players gambled online over the year, an increase of 40% from 2017.

This, it said, suggested that average spend per player fell from €504m in 2017 to €452m in 2018. ARJEL put this down to increased interest in sports betting among new, lower-spending players resulting from the French men’s football team’s successful FIFA World Cup campaign.

However ARJEL noted that the strong full-year performance was not just down to the World Cup effect. For the fourth quarter of 2018, market revenue grew 18% to €347m, from stakes of €2.9bn, which represented a 20% year-on-year increase.

This was again driven by the sports betting vertical, which saw revenue grow 32% to €215m, with amounts wagered rising 51% to €1.1bn. The majority of wagering activity took place around football, which accounted for €662.9m of total stakes, up 54% from Q4 2017. Basketball was the second most-popular sport, accounting for €162.7m of bets, followed by tennis, which accounted for €111.4m of the total. In-play wagering, while growing, lags behind pre-match betting, accounting for 36% of stakes.

The fourth quarter also saw betting on horse racing grow in terms of revenue and stakes, following years of struggles. Revenue for the three months ended December 31, 2018 was up 1% to €67m, with amounts staked rising 2% to €275m. ARJEL said while a second consecutive year of growth did suggest that the vertical was on an upward trajectory, it said that a 2% decline in weekly player activity in Q4 was cause for concern. Active weekly player accounts fell to 138,000 in the period.

Poker, meanwhile, benefitted from international liquidity pooling with Spain and Portugal, which helped amounts wagered in cash games grow 11% to €1.0bn, and tournament entry fees rise 5% to €577m. However, Q4 revenue fell 1% to €65m.

Looking ahead, ARJEL said that it would pay particular attention to the influx of new players prompted by the World Cup, to ensure they did not develop bad habits. As part of its efforts to protect players, it would look to run similar responsible gambling campaigns to that launched ahead of the World Cup.

It will also pay closer attention to predictions and tipping sites, which it said contravened regulations by promoting gambling as a way to make money, rather than as a form of entertainment.