This new legal framework will bring competitive gaming out of its grey area.
French law prohibits the organisation of “lotteries”, meaning operations that give the public the hope to win a prize on a skill or chance based basis when the participation to such operations is conditioned to a financial participation whatever its nature (payment of a sum of money, purchase of a product, payment of telecommunication fees etc…), and regardless of whether or not such participation is reimbursed.
The organisation of gaming competitions did not fall within the scope of existing exceptions to this prohibition relating to authorised gambling and promotional prize draws, making them technically illegal. In practice and despite this prohibition, gaming competitions have taken place in France in the past without any reaction from the authorities, but in theory, their organisers risked heavy fines (up to 450 000 euros for corporations).
Legal competitive gaming tournaments must be differentiated from illegal gambling or lotteries.
When the French government submitted to public consultation on September 2015 a draft bill on the Digital Republic (the “Bill”), the Syndicat des Editeurs de Logiciels de Loisir (SELL), a French organisation that promotes the interests of video game developers, saw an opportunity to clarify the legal rules applying to gaming competitions. The positive reactions that followed resulted in the provision of an article in the Bill to legalise gaming competitions.
Under its current version, the organisation of gaming competitions – as they are defined by law – 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;
- The amount of subscription costs or other financial participation must remain below a certain cap, to be determined in the future by secondary legislation. For online gaming competitions, internet connection costs as well as the purchase of the game itself will not be considered as a financial participation;
- The organiser must notify the competent authority of the event.
Employment status of professional players
Secondly, professional gamers will be granted an official status under labor law rules. They will thus be eligible for national health insurance, unemployment and retirement schemes.
Professional gamers may also enter into a fixed-term contract with an association or a company dealing with gaming competition provided that such association or company has received an authorisation from the authorities. Hopefully, this will make it easier to create professional teams in France, as well as drawing talent from outside the country.
Unless the Senate decides to amend the articles of the Bill on gaming competitions (which we understand is quite unlikely as it does not tackle controversial issues), its adoption will introduce many innovative rules. It remains now for us to await the final adoption of the Bill which shall take place on September 27th, 2016.
We would like to thank Ms. Claire Esoua Ntouba, who has interned in both our Cologne and Paris offices, for her valuable contributions to this article.