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Latest Developments In French Gaming RegulationTatjana Klaeser, ULYSTatjana KlaeserFrom gaming to gambling – Skill, social andmobile gaming on the regulators’ radarWith its wide success and increased monetization,the gaming industry has necessarily attracted theattention of regulatory institutions throughout Europewho critically observe the shift from casual gamingdesigned to bring people together towards commercialservices essentially aiming at generating profit.This raises the question of where to draw the linebetween casual gaming and speculative gambling.The French legislator seems to consider thatboth industries should fall under one and the sameprohibition principle, already contained in the LotteriesAct (see below). Discussions on the reform of Frenchconsumer law plan to extend the prohibition of lotteriesto games of skill interpreted in the broadest sense, so asto also include social and mobile games.Thus, France may well be paving the way for otherEuropean regulators to take action as regards thesocial gaming industry. Yet, the French government’sapproach cannot efficiently meet the motives of publicinterest invoked to justify legislative interference.Current legal frameworkUnderstanding the impact of the proposed amendmentsrequires a prior overview of the current situation.To date, the French legal framework in relation togambling is constituted by several pieces of legislation,the exact scope of which is not precisely defined andmainly relies upon case law:- The 1836 Lotteries Act concerning theprohibition of lotteries, recently included underArticle 322 of the Homeland Security Act, whichbans “any operation offered to the public, under anydesignation whatsoever, which creates the expectationof winning a prize by means of chance”;- The 1983 Act concerning the prohibition ofgames of chance included under Article 324 of theHomeland Security Act which mainly prohibitsholding a gambling establishment open to thepublic, exploiting unauthorized games of chancewith a monetary stake, importing, manufacturing orexploiting any machine working on a chance basisand procuring any direct or indirect advantage uponcommitment of a stake ;- The 2010 Online Gambling Act which definesa game of chance as “a paying game where chancepredominates over skill and on the combinations ofintelligence to obtain the prize”;- Article L. 121-36 of the Consumer Codeconcerning commercial lotteries which considersthat “advertising operations in writing which tendto raise the expectation of a prize attributed to eachparticipant, whichever the modalities of drawing,can be made only if they do not impose any financialcontribution or expense of any form. When theparticipation in the operation is subject to a priorpurchase, the operation is only illegal if it is unfair”.On these grounds, French case law and scholarshipauthors traditionally consider that a given game qualifiesas a game of chance or lottery subject to licensing orprohibition provided that four specific cumulativeelements are fulfilled: (i) an offer to the public, (ii)requiring a financial sacrifice, (iii) which creates theexpectation of a gain, (iv) by means of chance.If one of the elements is missing, the game is legalper se. However, if a game fulfils all 4 conditions andis not operated by a duly licensed company, it wouldbe considered illegal in France should the operatoraccept wagers from the French public.Proposed amendments withinthe Assemblée NationaleThe proposed amendments to French gaming law ascontained in the Bill on Consumption 1 appear not torecognise the typical, industry-based differences madebetween gaming and gambling as they plan to includeboth under one and the same general prohibitionprinciple laid down in the Lotteries Act. Furthermore,no distinction is being made within the variousareas of gaming, whether as to the device beingused (computer, mobile, social media) or the type oftransaction proposed (e.g. pay-to-play or freemium).This leads to a gap between legislation and themarket due to a lack of understanding by the Frenchlegislator of the variety of gaming activities at stakeand the fact that the specific features of each shouldbe taken into account within an adapted regime.Basically, in the eyes of the French regulator ofonline games of chance (ARJEL), it just comes downto protecting consumers against “supposedly free ofcharge online games, games supposedly based uponskill or games where the gains are supposedly virtual”as expressed in its wishes for 2013 2 .This call for legislative intervention was echoed14 | European Gaming Lawyer | Autumn Issue | 20131http://www.senat.fr/leg/pjl12-725.pdf2http://www.arjel.fr/IMG/pdf/2013-voeux-arjel.pdf