SBC Correspondent Jake Pollard reports on the power plays of FDJ, as regulatory discussions turn to French gambling’s pending evolution…
The Autorité Nationale des Jeux’s (ANJ) recent report into the illegal online casino market in France confirmed previously published estimates of its size, value and exposure to consumers. Yet, the question of its regulation and the possible outcome that Groupe FDJ may be granted an exclusive licence for online casino, continues to weigh on the French online gaming sector.
Whether such a scenario is really feasible is impossible to say, but one thing is clear: FDJ will be a key player in any evolution of the French gambling sector.
This follows recent news that FDJ was in talks with the French government over an exclusive iCasino licence, with one contact explaining that “the authorities could present (the FDJ regulation project) as a three- or five-year experiment with a mid-term review, following the example of what they have done with web3 regulations”.
Let’s play detectives
Stéphane Pallez, CEO of FDJ, also mentioned a two-stage scenario in response to a question on the regulation of the online gaming segment at a gambling conference organised by the MP Eric Woerth in June: first as an ‘experimentation period’, with a ‘wider opening’ set for a later date.
In terms of regulatory talks, FDJ also benefits from having the field to itself. Over the past six months, the French online gambling trade group (AFJEL) and the land-based industry group Casinos de France have tried to pass online casino regulations but their moves were rejected by the government, leaving the field wide open for the FDJ.
In its report on the gambling sector published last September, the Cour des Comptes, France’s national audit office, also raised the issue of online casino regulation in France.
It said that it was topical and that “the possibility of their authorisation would mean the end of the land-based casinos’ monopoly on table games and slot machines, (and) is a matter of concern for casinos, local authorities and FDJ”.
Back to ECJ?
Outlining the various regulatory options – open competition as in Sweden and Denmark, reserved for operators who already have a physical establishment as in Switzerland and Belgium – it said that Casinos de France (CdF) plans to grant exclusive rights to operators that physical-digital mirror offerings “requires in-depth legal work, in order to reconcile it with the case law of the European Court of Justice”.
But as one contact noted: “If the question of compliance with European competition law is raised for CdF’s JADE project, it would be incredible if this were not the case for a possible online casino exclusivity granted to FDJ”.
Consequently, FDJ is also currently subject to European Commission proceedings for illegal state aid in connection with its privatisation in 2019. FDJ paid €380m to the French government in exchange for the 25-year lottery and retail sports betting monopolies. AFJEL considers this amount to be insufficient and has lodged a complaint with the European Commission.
In an opinion published in 2021, the Commission stated that it doubted “whether the remuneration of €380m due by FDJ corresponds to market conditions”.
FDJ scratchcards – “Payout level is the only difference”
Returning to the French audit office report, it noted that FDJ’s online instant and scratchcard games were “similar in appearance to online slot machines, but differ from them in one significant aspect, their payout ratio is less than 75%, compared with 95% for slot machines”.
The report further cited that “the complexity of the subject should not lead to further delay in the necessary consideration of all its dimensions” and called for all stakeholders to be involved.
ANJ rectifies final report
ANJ’s report on illegal online casinos was first expected this summer, but the initial version published on its website named a major B2B igaming supplier as a key player in the current illegal online casino market targeting France.
Two firm letters from the group’s lawyers, one to PWC (the authors of the report) and the other to ANJ, enabled a new report without that company’s name to be quickly uploaded onto the ANJ website, a matter which should be noted by market observers.
This article is published by SBCNews in partnership with Gaming&Co.