4H Materials

France intensifies the fight against illegal online operators

According to next.io, France is going to intensify the fight against illegal online operators.

In the government agencies' agenda:

  1. Initiation of criminal cases against individuals associated with offshore operations;
  2. Holding gaming and hosting providers collaborating with illegal operators accountable;
  3. Strengthening cooperation with payment providers to block illegal payments;
  4. Enhancing collaboration with regulators in other countries to unite forces against offshore companies.

Ivan Kurochkin, Partner and Head of Eastern Europe Desk, comments on the situation:

For all jurisdictions with local regulations, illegal/offshore online gambling remains a significant issue. In recent years, there has been a trend towards

a) regulators/government understanding of this issue;

b) searching for tools to combat this.

Government agencies do not always adopt an approach where, on the one hand, they support the activities of legal operators and, on the other, they combat illegal operations.

Unfortunately, France is no exception. The state legally banned online casino activities in 2010; this did not impact the demand for this type of entertainment, and players naturally turned to illegal operators. Eradicating illegal online casinos from the market will be challenging for the state unless it is prepared to offer players a legal alternative.

When regulators or operators facing a similar problem contact 4H, we always share our approach, developed by studying best practices in this matter.

Based on our experience, we see that during the legalization/reform of legislation, the state must set itself two tasks:

  1. Make offshore operations extremely difficult practically;
  2. Make legal operations more profitable for gambling operators and attractive for players while maintaining control over the industry.

Over time, we have codified tools enabling states to achieve these goals. They can be conditionally divided into two groups: active, which complicates offshore operations, and passive, which increases the attractiveness of legal operations in the country.

Active tools to combat offshore operations include:

  • Domain blocking;
  • Financial blocking;
  • Bad Actor clause and similar approaches;
  • Administrative and criminal liability for offshore operators and their management representatives;
  • Public activity of the regulator and active informing of the public about changes in legislation and the dangers of offshore operations.

Passive instruments include:

  • Legalization of gambling across all verticals (online casinos, online poker, online bookmakers);
  • Economically reasonable, balanced, and effective regulation of the industry, meeting modern global trends in gambling legislation;
  • High-quality use of active tools to combat offshore operations to increase the attractiveness of the market for legal operators without competing with offshore operators.

World practice shows that the greatest effect in the fight against offshore operations comes from using passive instruments. In this case, the legal supply of gaming products on the market increases, reducing the share of offshore operators and the attractiveness of the market for illegal operations.

It is crucial to remember that results are possible only if active and passive tools are used simultaneously. If only one group of instruments is used, regulation will remain incomplete and, as a result, ineffective in combating offshore companies.

We hope that France, along with active instruments, will begin to employ passive ones, allowing it to achieve its set goals.