French Tax Sparks Protest & Fear

July 13th, 2010 | 7:59 pm

A recent French law requiring online poker companies to pay a 2% tax on all pots and tournament buy-ins recently led to a three hour protest on Poker Stars.

Players at Poker Stars, fed up with new French gambling regulations, recently held a three-hour protest in which players occupied seats, but did not play any hands. The new 2% tax is applied to all cash hands, as well as tournament buy-ins. Under the new law, poker operators are forced to take the hit or pass on the additional expense to players. Most have chosen to pass the costs on to players which has driven the organized protests. Some have even compared the recent uprisings to the Tea Party movements seen around the United States.

Experts from some sites operating in France, including Doyles Room, Absolute Poker, Ultimate Bet, Poker Heaven, and others have estimated that the average player will actually play 26.8% fewer hands due to the increased cost. The figures were based on computer simulations involving 1 million typical hands taking into account the increased rake fees caused by the added taxation. Experts also fear the higher rake will turn most small to moderate winning players into losing players.

One point of brigher news, however, comes from a report from Egaming. They point out that Sweden followed a plan to lower rake in order to drive tax collections. The resulting increase in players more than made up for the lesser rake taken by the sites. Perhaps in the future France and other countries seeking to pass similar legislation will look to the Swedish model for guidance.