France’s gambling sector grows, as tax rate looms

France’s Gambling Sector Experiences Resurgence in 2024 Amidst Female and Youth Engagement But Faces Tax Challenges Ahead

In 2024, France’s gambling industry has demonstrated notable growth, characterized by increasing participation from younger demographics and a significant rise in female engagement. Insights from the l’Autorité Nationale des Jeux (ANJ) highlight a rejuvenated market atmosphere following two years of revenue decline.

The ANJ’s recent market review articulates a sense of “vitality” in the sector, as Active Player Accounts (APAs) surged by 11% from the previous year, reaching an impressive 5.7 million. This rebound is evident across various sectors, with APAs in sports betting up by 13%, poker by 11%, and horse racing by 4%.

This growth starkly contrasts with 2023’s trends, where APAs saw a downturn of 3.9%, and unique players dropped by 7.3% over the year.

On the financial front, the total Gross Gaming Revenue (GGR) for 2024 reached €14 billion ($15.8 billion), marking a 4.7% increase year-on-year. Online gaming contributed significantly, accounting for 18.6% of the total market with GGR hitting €2.6 billion—a notable 12% rise from 2023. Online sports betting particularly thrived, surging by 19% to €1.8 billion and capturing 69.2% of the online market share.

Significant Rise in Female Participation in Sports Betting

The ANJ has reported a remarkable increase in female participation within the sports betting arena. Female bettors rose by 14.5%, bringing the total number of women engaged in sports betting to half a million in 2024. Overall, the sports betting player base expanded by 8.5%, amounting to 2.8 million participants.

This increase can be attributed, in part, to the heightened visibility of women’s sporting events and a correlated “catch-up effect.” The largest demographic of female players comprises those aged 25-34, totaling 174,340 participants, with 142,902 in the 18-24 age group and 96,480 in the 35-44 segment.

More broadly, players between the ages of 18 and 24 represented 30% of the overall betting population in 2024, underscoring a shift toward younger engagement.

As player activity and revenue increase, the ANJ has raised concerns about potential risks for players in 2025 due to anticipated advertising expenditure growth. Despite a lack of major international sporting events scheduled for this year, operators are signaling an intent to amplify marketing budgets.

Operators must disclose marketing spending plans to the ANJ at the start of each year. In January, the ANJ urged online operators to reassess and potentially reduce their promotional expenditures for 2025, following reports of an 11% increase in spending across the sector.

Projected marketing expenditures are expected to reach approximately €695 million ($724 million) by the end of 2025, encompassing both promotional costs and player incentives. The ANJ noted, “The dynamics of the online market are influenced by aggressive commercial strategies,” which include heightened budgets for marketing, lucrative financial rewards, and cross-selling tactics spanning various segments.

Impending Tax Increases: A Potential Setback

While the ANJ highlighted renewed market vitality in 2024, this momentum may be jeopardized by newly implemented tax rates set to take effect later this year. FDJ United recently disclosed that its tax obligations in France nearly hit €45 million in 2024, with group revenue rising by 16.9% to €3.07 billion. Projections indicate an even greater tax impact in 2025.

Starting July 2025, operators will face increased tax and social security contributions, as stipulated in France’s 2025 budget finance bill. Gambling tax rates, based on GGR, vary by sector, and operators are also liable for an enhanced social security contribution across all verticals. Notably, the contribution for online sports betting will escalate from 10.6% to 15%, while on-premises betting will rise from 6.6% to 7.6%.

The ANJ recognized that these tax changes could significantly affect the market landscape in 2025, noting, “It will be crucial to assess whether the new 15% tax on commercial communication expenditures by online sports betting operators will influence actual investment levels in the latter half of the year.”

François Riahi, CEO of Banijay Group, the owner of Betclic Everest Group, labeled the tax hikes as “anti-competitive” and has expressed intentions to challenge these changes with regulatory bodies. In their 2024 results, Banijay estimated facing a €20 million impact from increased taxes in the upcoming year.

As France’s gambling sector navigates this dynamic landscape, the focus will undoubtedly shift toward maintaining growth while managing the intricate balance between regulation and market vitality.