French Cash Online Poker Market Gets Fried

July 27th, 2014 | by Brian Corlisse
The French online poker market is led by Winamax and PokerStars.

Winamax remains the biggest player in the French online poker market. (Image: rakepoker.fr)

Online poker may be alive and well in France, but there’s no doubt that the size of the market there is shrinking fast. And while there are still plenty of players at the tables for now, the latest numbers don’t look good. And as the old saying goes, it’s the fall that’ll kill you.

According to the latest numbers from French gaming regulator ARJEL, the industry there is still suffering from double-digit drops in cash game traffic at regulated sites. For the second quarter in 2014, total cash game bets were down by 17 percent compared to last year. For the first half of the year, the numbers are similar, down 18 percent year over year.

Cash Games Look Healthy, But Decline is Steep

That’s an important figure to keep in mind, even as the raw numbers generated through play may still look impressive. There was over €1 billion ($1.35 billion) in betting for the quarter, and three of the top 16 poker sites in the world are part of the segregated French market. But that market seems to have been contracting over the past few years, with many suggesting that the nation should consider combining player pools with neighbors like Italy and Spain.

There are some interesting signs hidden inside the numbers. While cash game play is down significantly, tournament play remains popular in France. In fact, tournament entries were actually up 6 percent year-over-year, perhaps due to the popularity of the Expresso “lottery” sit-and-go tournaments offered by Winamax. According to PokerScout, those games have had the effect of drawing away cash game traffic at sites that have introduced them.

This has had the impact of making the French market much more reliant on tournament play to generate revenue. Back in 2011, only 18 percent of all revenue was generated through tournaments. Today, that number stands are nearly 35 percent, and seems likely to continue to grow.

Taxation May Harm Cash Game Play

This may be due in part to the style of taxation used at regulated French sites. While tournament entries are taxed just once, every pot in a cash game is taxed at 2 percent of the total wagered regardless of whether or not the flop is reached. That’s a pretty hefty price for operators, one that prevents them from offering rakes as low as many online players are used to.

Another issue may be that the regulars are either walking away from the sites, or becoming more casual players. ARJEL reported that compared to last year, there are 21 percent fewer regulars in cash games, and 13 percent fewer in tournaments as well.

There’s also the elephant in the room: the continued presence of unregulated sites. Many French players are still participating in games run outside of the national licensing system. One study by France’s Observatory of Games earlier this year found that 47 percent of players still hold accounts at unlicensed poker sites, which has surely kept the regulated market from reaching its full potential.

At the moment, there are a number of large sites regulated in France. Winamax and PokerStars are in a close battle for the top spot in the market according to PokerScout.com, with each averaging about 1,000 active cash game players at any given time. Other major sites include PartyPoker, which averages around 500 players, and iPoker, with just under 400.

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