A law dated October 7, 2016 has implemented in France a legal framework for video games tournaments which were not previously specifically regulated, so that they were deemed falling within the general prohibition of paid-for lotteries.
Background : a general prohibition of paid-for lotteries applicable to video games tournaments
Section L322-1 of the French Interior Security Code prohibits the public offer, upon payment (or with any other form of financial contribution), of games based on chance which create the hope of a gain .
Further, pursuant to Section L322-2-1 of this Code, this prohibition covers games based on the skills of the players. The financial contribution is deemed existing when the organizer imposes a financial contribution and so, irrespective of the fact that such a contribution is reimbursed, at a later stage, by the organizer.
In a report issued in March 2016 at the request of the French government and addressing e-sport/videos games competitions issues, the following principles have been reiterated, based on the aforementioned rules :
the criterion of the "payment"/financial contribution is widely assessed, so that communication connection costs (telephone, internet) are per se a financial contribution; the criterion of the "chance" is present in video games competition, despite the fact that in certain instances, it is a small element of chance. According to the Report, this reasoning applies for most sports or board games (choice, at random, of the color of the pawns, of the side of the playground...). This report drew the conclusion that a video games competition meets the four criteria (public offer, hope of a gain, chance and financial contribution), thus leading to the prohibition set forth in the aforementioned articles, if it is available to the public, offers gains to the winner and leads to the payment (even a small amount) of an entry fee.
This Report noted, however, that some of these events do not per se violate the French public order when the financial contribution required from the players is not excessive and does not encourage the organizer to multiply the events in order to increase its profits.
In its conclusion, the Report recommended to the French government to exclude, under certain conditions, video games tournaments from the general prohibition of the lotteries as set by Section L322-1 and seq. of the Interior Security Code.
The implementation of exceptions to the general prohibition of...