The European Commission has concluded its investigation into the state aid allegations surrounding Française des Jeux (FDJ), France’s exclusive lottery and sports betting provider, affirming the legality of FDJ’s monopoly while revising the payment terms required for this exclusivity. The in-depth probe, launched following complaints in 2020, examined whether France’s privatization of FDJ provided unfair state aid by allowing FDJ to operate with an insufficiently low fee for its exclusive rights.

Investigation Results in Adjusted Monopoly Fee

The investigation revealed that FDJ’s annual payment of €15.2 million, totaling €380 million over a 25-year term, was below what the European Union deemed compliant with competition rules. In response, the Commission raised the required payment to €477 million, or an additional €97 million. This adjustment aligns FDJ’s financial obligations with EU standards, which the Commission stated removes any potential advantage previously perceived as state aid.

Following the Commission’s ruling, FDJ expressed satisfaction with the outcome, citing alignment with the French Conseil d’Etat’s ruling from April 2023, which had upheld the framework established during FDJ’s privatization. “FDJ welcomes the closure of this investigation and the European Commission’s confirmation… that the legal framework adopted when the Group was privatised was robust,” the company stated.

Market Response and Future Implications

FDJ’s shares responded positively to the EU’s decision, with prices rising 5.6% on the Paris stock exchange, reflecting investor confidence in the company’s stability following the compliance confirmation. The Commission’s ruling comes amid FDJ’s recent acquisition of Kindred Group, in which FDJ gained a controlling stake of over 90%. The acquisition has led to some board resignations at Kindred, including Chairman Evert Carlsson, as FDJ integrates its new asset into operations.

However, FDJ may soon face additional competition. The French government has indicated that it is considering expanding the gambling market as part of its 2025 budget, suggesting the possibility of legalizing online gambling. A public consultation with industry stakeholders is planned for early November, signaling potential regulatory shifts that could alter the competitive landscape in the coming years.

Sources:

“Conclusion of the European Commission’s Investigation“, groupefdj.com, October 31, 2024.

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