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New regulation threats social gaming in France

social game franceSocial and skill gaming operators working in the French market are bracing themselves for a proposed change in the law that could see them forbidden in the first instance and at a future date subject to regulation, most likely by ARJEL, France’s online gaming authority.

The new regulation would ban any game of skill or chance that requires a financial transaction in order to play and offers any ‘hopes of gain’.

The new measures are part of discussions on the reform of French consumer law and plan to amend to the law on lotteries and games of chance or skill, where punters can take part in lotteries or prize draws for a small financial contribution and play to win a house or a car. They can ask to be reimbursed, although they rarely do. The authorities describe these products as ‘falsely free games’.

If enacted, the new legislation would mean any game requiring players to deposit funds and which offers any hope of gain, financial or other, would be banned in France. The new measures could ultimately prevent social gaming companies working on Facebook and apps developers offering freemium products from accepting French customers and would effectively kill off their business models.

The wording of the amendment is also problematic as it refers to games offering any ‘hopes of gain’, whether financial or not. Such a wording brings social gaming under the new regulatory framework.

A further amendment in reference to skill games would be added, stating: “This prohibition covers games whose functioning relies on the know-how of the player [on the player’s skills]. The financial contribution exists in all situations where the organiser requires a financial contribution from players prior to accessing the game, even if a subsequent reimbursement is made possible by the rules of the game.”

Changes to the amendments must be put forward by Thursday this week and are set for discussion on July 22 at the French Senate and sent back to the Assembly with remarks and proposed changes. The Assembly will then debate the revised text in early September after the summer recess.

The potential legislation also presents threats at a European level for social gaming companies. EU Member states are debating whether to regulate social gaming with increasing regularity. Should France, somewhat inadvertently, regulate the sector, other EU countries could decide to follow a similar course of action.

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