Paris announced this week that it is ready to legalize online gambling on horse racing and football, in a clear sign of its intention to back away from a conflict with the European Commission. The liberalization would allow companies like London-listed Sportingbet to operate in the country.

“The Government is not hostile to an opening up of sporting bets on the internet,” Eric Woerth, the French Budget Minister, said. Mr Woerth is expected to unveil more details about the legalization of online gambling when he meets International Market Commissioner Charlie McCreevy, next week.

During months, French authorities and politicians argued that the private sector betting could lead the country’s horse racing industry to bankruptcy, drive bettors to gambling addictions and encourage money laundering. Now, although the country has softened its position, the government is not willing to go as far as Mr McCreevy would like.

The International Market Commissioner wants all operators with a license granted by a European country to be allowed to operate in France. However, Minister Woerth has said he is only prepared to legalize operators with licenses issued by France.