Online Poker Operators Not Losing Quite So Much in France

The latest figures published but French regulator ARJEL are introduced optimistically: “For the first time since the opening of the market, many operators have managed to achieve an operating profit.”

Overall, however, things still look bleak, thanks to high taxation strangling the market.

As pokerfuse PRO first reported last week, in 2012, online gaming operators lost €85m. In just poker, the loss was €36m.

But that’s a big improvement on 2011’s figures: Total losses were €183m.

Of their gaming revenues, 37% goes in tax, 29% on operating costs and fully 46% on marketing, which includes cash bonuses—As those three figures add up to 112%, any company operating on that basis did not have a good year.

Motivation for the gaming company executives’ recent letter begging for tax reductions is obvious. Currently every cash game pot is taxed at 2%, even for unraked pots, resulting in unworkable level of taxation.

Much of the 2012 improvement was due to reduced marketing spending, which fell from €314m to €245m. In January 2012, PokerStars.FR, then the market leader, significantly reduced the VIP system in order to cut its operating losses. It resulted in sit-out protests and ultimately lost its #1 position to Winamax.