Who: French Parliament
When: 7 October 2016
Law stated as at: 7 November 2016
The French legislature has adopted a new legal framework to regulate video game competitions. This new legal framework is a significant step forward and brings legal certainty to the organisation of gaming competitions in France.
Previously, French law prohibited the organisation of “lotteries”. This meant that games of skill or chance were not possible where participation was subject to some form of payment (for example, payment of a sum of money, purchase of a product or payment of telecommunication fees), regardless of whether such payment was later reimbursed by the promoter or operator. As such games were prohibited, promoters or operators were subject to
heavy criminal fines (up to 450,000 Euros for legal entities).
Nonetheless, despite this prohibition, gaming competitions took place in France without any reaction from the authorities.
Now, the organisation of gaming competitions will no longer fall foul of the prohibition of illegal “lotteries” provided that they comply with certain conditions among which:
- no bets can be organised around the competition;
- for competitions organised in the presence of the players (i.e. offline competitions), the participation to the competition could be conditioned by financial participation (registration fees or other participation costs) provided that (i) the amount of such costs or other financial participation remains below a certain cap which shall be determined in the future by secondary legislation and (ii) effectively corresponds to the participation to the costs of organising the event (i.e. does not serve the purpose of ensuring that the organisation of the event is beneficial or of paying the prizes offered to the players). Should the defined cap be exceeded, the promoter or organiser shall be able to show that they implemented a mechanism – among a list to be defined by secondary legislation – promising that the value of the prizes (in cash or in kind) will be distributed amongst the players/winners;
- for online competitions or online qualifying phases; no financial participation shall be requested from the players, although connection costs and the purchase of the game will not be considered as a financial participation; and
- the promoter or operator shall declare the event to the relevant authority.
Why this matters:
The organisation of gaming competitions in France is an exciting development as promoters and operators will no longer have to fear that the organisation of such events could lead to criminal sanctions (although in practice, the organisation of such events has always been tolerated by French authorities).