SBC News Voice of the Sports Betting Industry
Groupe Francaise de Jeux (FDJ) is looking to transfer its Ontario Lottery and Gaming Corporation (OLG) technology contract to Kambi Group Plc.
An announcement by Kambi revealed that the novation deal is still pending official consent by OLG, but that all participating parties have also mutually agreed for FDJ to ‘prematurely retire its contract’.
The announcement read: “The three parties have since agreed to a contract novation process which, subject to conditions, is expected to lead to Kambi assuming the contractual responsibilities currently held by FDJ, which are due to run until 2032.”
A government-owned corporation, OLG organises and oversees various gaming operations on behalf of the province of Ontario, including lottery, betting and igaming.
FDJ has entrusted its lead technology partnership with OLG to Kambi due to the latter’s established presence in Ontario since the market’s launch in 2022 – evidenced through supplier deals with the Mohegan Gaming & Entertainment and Great Canadian Entertainment leisure groups.
It is expected that Kambi will complete the takeover of FDJ’s contract by H2 2025.
Further terms of the novation process read: “To complete the assignment/assumption of the contract, Kambi must make a material initial investment which, as a non-recurring item affecting comparability, will not form part of Kambi’s full-year 2025 operating expenditure guidance.”
Werner Becher, Kambi Group Chief Executive Officer, said: “The prospect of partnering with an organisation of the size and stature of OLG is an exciting one for Kambi and we are working diligently to complete the novation process with FDJ and launch later this year.
“Ontario has a competitive online market, but I believe a combination of OLG and Kambi will see PROLINE rightly compete with market leaders while continuing to raise the bar of its retail product.”
FDJ optimises cost controls
The French gambling conglomerate is facing a year of internal reorganisation and group-wide restructuring in anticipation of upcoming tax increases in France.
At the close of 2024, French Senators approved tax increases across all gambling-related activities of the 2025 Budget, as part of the Social Security Financing Act, which seeks to raise €500m in direct taxes from the French gambling sector.
Online and retail lottery GGR will be taxed at 7.2% (currently 6.2%) from 1 July 2025 onwards. As a result, FDJ is anticipating a direct hit to its revenue and recurring EBITDA by €45 million in FY25, equating to a full-year impact of around €90 million.
The company is expected to give more details on its plans to circumvent the expected losses caused by the tax hike during its full-year 2024 financial call on 6 March.
For now, the company has communicated that its multi-year action plan is designed to “fully offset” all financial impacts of the tax increases by 2027.
It’s safe to assume that this plan involves the revision of its existing commercial relationships, including its sportsbook technology contract supplying OLG’s online PROLINE brand and its 10,000 retailers.
Last year saw FDJ selling its B2B technology unit, Sporing Solutions, to Betsson AB – replacing it with the integration of technology from Kindred Group, which FDJ acquired for €2.45bn.
