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France Considering Regulating Social Gaming

The French government is moving ahead with amendments in its consumer laws that could ban real-money social and skill gaming operators from the French market.

French gaming regulators have proposed changes to the law as part of a larger discussion on consumer reforms, specifically targeting lotteries and games of chance or skill where consumers must pay a fee to play. The proposed regulations would ban any game of skill or chance that requires a financial transaction in order to play and offers any “hopes of gain”—whether it be prize money or goods such as a car or a house.

Described as “falsely free games” by French authorities, this broad reinterpretation of the law could prevent social gaming companies working on Facebook and apps developers offering “freemium” products from accepting French customers, and would effectively kill off their business models.

The games would be banned at first, and then at a future date be subject to regulation, most likely by ARJEL, the French online gaming authority. The inclusion of the words “hopes of gain,” whether financial or not, could essentially bring social gaming under the new regulatory framework.

A further amendment in reference to skill games would be added, stating: “This prohibition covers games whose functioning relies on the know-how of the player (on the player’s skills). The financial contribution exists in all situations where the organizer requires a financial contribution from players prior to accessing the game, even if a subsequent reimbursement is made possible by the rules of the game.”

If enacted, the law would essentially regulate social media gaming, a topic often discussed by European Union member states. The French government could potentially threaten social gaming companies throughout Europe if the E.U. pursues a similar action.