France’s senate has approved social security tax increases for gambling to drive up social security funding and bring down national debt.
In December 2019, France’s senate passed a budget bill that would tweak how the government collected gambling taxes. These were subsequently calculated on GGR rather than turnover.
The 2019 bill noted the additional social security-based tax would also change to be based on GGR. The combined taxes resulted in operators paying 37.7% for horse racing, 40.8% for online poker, 55.2% for online sports betting and 44.5% of GGR for retail sports betting.
A new Finance Bill draft for France’s 2025 budget was presented to MPs on 10 October and at the time media reports speculated that gambling taxes would be included in the legislation. However, MPs voted to approve a version of the bill which did not call for increased gambling taxes.
The Social Security financing bill has run alongside the finance bill, but focuses specifically on social security expenditure, as it relates to state revenue allocation from the Finance Bill. It too was passed through the National Assembly on 10 October.
The Social Security financing bill faced a number of amendments when it hit the senate on 20 November. These included increases to the social security-based taxes being paid by gambling companies. Tobacco products and high-sugar beverages were also included in the amendments and faced similar tax increases.
Lottery, betting and online poker hit with increased contributions
Senator Elisabeth Doineau tabled an amendment to Article L.136-7-1 of France’s Social Security Code to increase the social security tax on lottery games from 6.2% to 7.6%. Another amendment to Article 137-21 sought to raise the social security contribution for physical sports betting from 6.6% to 7.6%. Amendments also sought to increase online sports betting’s social security contribution from 10.6% to 15%.
“This amendment proposes to align the taxation of lottery games, in the same way as sports betting. In a spirit of consistency and simplification, an increase in this tax rate to 7.6% is thus proposed,” Senator Doineau said.
A 10% of GGR social security contribution for online poker was also added to Doineau’s amendments.
However, social security taxes on horse racing were left untouched “so as not to undermine the financial balance of the horse racing industry” the bill said.
One of Doineau’s amendment‘s noted the strengthening of social security taxes paid by the gambling sector in France will aim to “prevent the risk of excessive and pathological gambling”, citing studies that showed a link between the rising popularity of gambling in France and the country’s gambling addiction levels. The funds raised by these taxes are also expected to help finance healthcare.
The tax rises are anticipated to increase the contributions from gambling to France’s health sector to €1.6 billion (£1.3 billion/$1.7 billion) from €1.2 billion previously.
The tax hike risks harming the impressive performance of the gambling industry in France, where sports betting grew 24% in H1 of this year with €5 billion wagered across the first half of 2024.
Doineau’s amendments claimed in the context of the growing market, the increased taxes on gambling “would improve the fairness of the collection system”.
