France’s iGambling Market Post Gains Across all Segments in Q2

France's iGambling Market Post Gains Across all Segments in Q2

France’s successful 2018 Fifa World Cup campaign provided a major boost for the country’s online gambling market, with overall revenues soaring by 34% to €302 million during the second quarter ending June 30th. The international football tournament took place in Russia this summer, at the end of which France saw off Croatia 4-2 in the final to claim its second title since winning the competition in 1998. While sports betting was the main beneficiary of the 5-week long soccer festival, gains were reported across all the country’s gambling verticals during the quarter.

Sports Betting Surges

Sports betting represents by far the country’s biggest online gambling segment, and during the second quarter it received €1 billion ($1.16bn) in wagers across twelve betting sites, compared to the €847 million taken during the previous quarter. Furthermore, the €181 million in revenue it subsequently generated represents a massive 67% increase compared to the €109 million taken in Q2 of 2017, with sports betting subsequently accounting for roughly 60% of all online gambling revenues. The second quarter also saw 960,000 new player accounts opened, while active player accounts per week jumped to 527,000 from 302,000 in Q2 of 2017.

All Verticals Post Gains

It wasn’t just sports betting which experienced a significant boost in Q2, however, as gains were reported across all of the country’s online gambling’s verticals. Wagers on horse races, for example, increased by 5% year-on-year to €250 million, resulting in revenues growing by 6% to €61 million versus the €58 million generated in Q2 of last year. Even poker, noted an improvement in its year-on-year revenue, albeit only a slight one.

Online Poker Turnaround

Last quarter, the French online poker market produced €60 million in gross gaming revenue (GGR), or 2.4% more than the same period in 2017. The vertical’s tournament and cash game offerings experienced vastly different fortunes, though. On the one hand, tournament poker saw its revenue rise by 8.7% in Q2, representing 13 straight quarters of growth, while on the other hand cash games posted an 8.2% drop in GGR, marking their biggest annual decline in eight quarters.

Despite posting only a slight gain in Q2, France has a lot to be pleased about concerning its online poker market as it has now strung together six consecutive quarters of growth. This is in sharp contrast to its first four years post-regulation in which the country’s regulator ARJEL all but dismissed the game as just a fad. What ARJEL failed to acknowledge at the time, though, was the adverse effect high taxation and a segregated playing pool was having on its poker industry.

Taxation vs Liquidity

In France, gambling operators have to pay an exorbitant 37% tax on their GGR, leaving little money left over for firms to spend on marketing or improving their offerings. Its negative impact can be seen in the number of poker brands currently operating in France, which has dropped from 22 to just 5 since launch, namely Winamax, PokerStars France, PartyPoker France, Bwin France, and PMU France.

Interestingly, online poker revenues have been improving gradually over the past few quarters despite taxation levels remaining unaltered, indicating that the country’s shared playing pool agreed with Spain, Portugal and Italy in July 2017 is beginning to bear fruit. France and Spain subsequently enacted their agreement at the start of this year, followed by Portugal a few months later, with Italy expected to join later on down the line.

PokerStars was the first operator to share its players between France and Spain, and was also the first to open up the Portuguese market after adding the country’s players to its existing shared player pool in May. The Stars Group has since announced that its poker revenues have increased by 33% post-shared liquidity, and as Severin Rasset, director of product innovation and operations at The Stars Group, explains:

“We believe that this has strengthened our offering in Southern Europe and we will continue to work hard to give our players the best experience in the market. Players benefit from the shared player pool between Portugal, Spain and France in all aspects of the poker offering and we hope that Italian players will benefit from the same great offer soon.”