French Prime Minister Michel Barnier announces new tax hikes for the country’s gambling sector. (Image: Peter Cavanagh / Alamy)

Newly-appointed French Prime Minister Michel Barnier is reportedly soon set to introduce policies to significantly increase the rate of tax on winnings from the nation’s casinos, lottery, sports betting, and online poker enterprises.  

Barnier took over from predecessor Gabriel Attal last month following the disastrous results of the summer elections in which the centrist bloc of President Emmanuel Macron lost its legislative majority. The 73-year-old has subsequently promised to decrease a ballooning budget deficit estimated to be tracking north of $188.3 billion while simultaneously restructuring his country’s struggling social security programs. 

Fiscal Focus 

A former VP of the European Commission, Barnier, is due to present France’s next annual budget on Thursday afternoon and hopes legislators will sign off on plans to make some $43.7 billion in savings while collecting additional tax revenues of around $22 billion. This wide-ranging proposal could see France bring its overall deficit for 2025 down to about 5% of GDP in advance of moves to reduce this percentage to below 3% by the end of the decade.  

“Paying off debt is the second-largest line item in government spending behind education,” Barnier told lawmakers on October 1. 

“Is it acceptable for us to spend more on interest payments than on our defence or research? My answer is no.” added Barnier.

If confirmed, this program would additionally see France grant an additional $547 million to its social security system so as to take the stressed safety net’s budget for the next twelve months up to approximately $1.7 billion. 

Optimistic Overhaul 

To help pay for all of this, Les Echos reported Barnier is to propose a major overhaul to the tax system attached to France’s gambling. The revamp would drastically simplify duties charged on winnings in hopes of increasing annual public contributions by as much as 40%.  

Barnier’s plan would see the gross gaming revenues tax attached to lottery and casino prizes rise by 2% and 3%, respectively, to 9.2%. The proposal also calls for this duty to apply to the entire difference between a stake and any subsequent winnings, as slot machines are currently only accessed at a very beneficial 68%.  

The blow is set to be even more pronounced for sports betting aficionados as Barnier’s plan reportedly calls for physical wagers to have their gross gaming revenues tax rate upped to 10% with online winnings subjected to an even steeper 15% duty. But it is online poker players that will really feel the heat as contributions to their stakes rise five-fold from 0.2% to 1%, while those enjoying in-person games are to be subject to a 10% tariff.  

Fateful Forecast 

News of the impending tax changes helped to push the individual price of shares in France’s national lottery, La Française des Jeux (FDJ), down by 9.7% last week, while land-based casino giant Groupe Partouche experienced a simultaneous drop of almost 4.4%. This came at the same time as the former firm released a doomed statement to Reuters in which it predicted Barnier’s budget would not contain measures concerning gambling taxes.  

“To our knowledge, the social security finance bill, which will shortly be presented to the Council of Ministers, will not contain any tax measures concerning gambling,” FDJ’s statement read. 

Undaunted, the French government reportedly believes the coming hike in gambling tax will have the added benefit of helping to check a recent rise in the popularity of games of chance and gambling. Ministers told Les Echos this fresh surge means approximately 6% of players, or some 370,000 people, are now at risk of developing an addiction to gambling. 

Industry Interest

However, the trade group representing France’s collection of about 200 land-based casinos, Casinos de France, disagreed and asserted its members already contribute more than $1.6 billion in tax every year via a rate of almost 57%. The body’s president, Grégory Rabuel, proclaimed the changes contained within the Barnier budget could also put as many as 45,000 jobs at risk and sign the ‘death warrant’ for any gambling-friendly establishments in Paris. 

“An increase in taxation would worsen an already difficult situation for our sector, which is the most heavily taxed in Europe,” Rabuel said.