The European Commission has ruled that French gambling operator La Française des Jeux (FDJ) must pay an additional €97 million ($103 million) to maintain its monopoly over lottery and betting in France, bringing its total payment for exclusivity rights to €477 million ($519 million). The ruling concludes a two-year investigation into whether the operator received unfair state aid.
The Commission’s ruling upheld that FDJ’s exclusivity does not constitute unfair state aid, responding to allegations raised by complainants in 2021 about potential advantages given to FDJ during its privatization. The privatization, completed in 2019, granted FDJ a 25-year monopoly on offline and online lottery games and offline sports betting. However, the Commission determined that an increased equalization payment was necessary to align with current market conditions.
“We welcome the closure of this investigation and the European Commission’s confirmation, in line with the French Council of State’s decision of 14 April 2023, that the legal framework adopted when the group was privatized was robust,” FDJ said in a statement, noting that the re-evaluated payment was within previously estimated ranges by France’s Participation and Transfer Commission.
FDJ confirmed it will recognize the €477 million equalization payment as an intangible asset, amortizing it over the 25-year term. This adjustment will impact FDJ’s financial statements, increasing its annual amortization charge and recalibrating net profits, which will influence future dividend distributions.
The decision comes amid robust financial growth for FDJ. The operator recently reported an 11.9% year-on-year increase in revenue to €2.10 billion for the first nine months of the year, with particularly strong performances in sports betting and digital gaming, where revenues rose by 39.3%.
FDJ’s recent €2.45 billion acquisition of Kindred Group, completed in early October, may further boost its financial results. The operator indicated that revenue could have reached €2.8 billion if Kindred had been integrated from the beginning of the year.
The French Competition Authority, however, has warned FDJ to keep its monopoly activities separate from Kindred’s commercial operations, barring any cross-selling efforts that could blur the boundaries between FDJ’s regulated monopoly and commercial ventures.
FDJ shares closed at €39.16 on Thursday, up 7.7% as investors responded positively to the European Commission’s decision.
Original article: https://www.yogonet.com/international/noticias/2024/11/04/83906-european-commission-rules-fdj-must-pay-extra-103-million-to-retain-lottery-and-betting-monopoly
