Insight
FRANCE La Française des Jeux
Bruno Le Maire, French Finance Minister
The FDJ is the only public company to distribute games in France. This is an exception. This exception was its strength. The FDJ has a history and a presence in all the towns and villages of France thanks to tobacconists and press offices and has been an economic success for more than 80 years. But that state can very well regulate games, fight against addiction and sale to minors without having a majority share in the FDJ’s capital. The FDJ can continue to grow without the state.
French government privatises state’s La Française des Jeux
The new role of the state shareholder is crucial to financing innovation. Asset disposal proceeds, including the privatisation of the FDJ, will finance a €10bn fund that will be invested in breakthrough technologies such as artificial intelligence, batteries or electric motors. France has fallen behind in the race for innovation but is catching up partly thanks to these privatisations.” Bruno Le Maire, Finance Minister
Despite fears from operators that privatisation of the lottery operator would destabilise the French gambling sector, the government has sold its 52 per cent stake
Te French government has completed a successful float on the Paris Euronext Exchange in which its first stage IPO secured an oversubscription of more than €1bn from public investors. Te floatation is one of the biggest in Europe this year as President Emmanuel Macron’s government pursues its policy of selling government shareholdings to fund innovation projects and boost the economy. Te privatisation also included a €380m payment the FDJ owes the state to retain its monopoly rights for its lottery and sports betting business.
Te Council of Ministers have announced that the state will continue to hold a certain degree of influence over the FDJ through the presence of a government commissioner on the board alongside directors representing the state. 40.5 per cent of all shares sold were to individuals and retailors making up the FDJ’s sales network, raising approximately €712m. Tese investors and retailors will be able to increase their holdings provided they hold their shares for 18 months. After this period, they will receive one additional share for every 10 acquired. A further €888m was raised through the sale of 44.9 per cent of issued shares to French and international institutional investors.
Te government has maintained a 20 per cent stake in the FDJ with the power to block any capital increase of more than 10 per cent of shares. Te privatisation of the state-owned lottery monopoly came after the French authorities announced the creation of a new national gambling authority, L’autorité nationale des jeux (ANJ), to replace former
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regulator, l’autorité nationale de régulation des jeux en ligne (ARJEL), in January 2020.
Te newly privatised FDJ has wasted no time in strengthening its retail services, sanctioning a buyout of French payment solutions provider Bimedia. Te agreement with Idinvest Partners, a European private equity fund, totalled €50m. Te FDJ has announced it will take control of Bimedia’s 6,400 points of sale terminals, which service 90 per cent of France’s tobacconists and newsagents. Te Bimedia transaction is seen as critical to the FDJ’s 2025 strategic vision as it seeks to modernise its retail network and diversify its customer services.
Operators in the French casino sector had previously expressed serious concerns that a significant increase in the number of FDJ outlets, currently totalling 30,000, would destabilise the sector following a leaked letter suggesting that a further 15,000 points of sale could be made available outside bars, supermarkets and service stations.
Over recent months, legislation has been introduced to quell operator fears, with limits imposed on player wagers, the percentage of earning expectations and the number of automatic machines available to the FDJ. Decree No. 2019-1060, which came into force on the day of the lottery operator’s privatisation in November, set out the specifications which the lottery operator will be subject to during the first 25 years of its privatisation, together with an agreement about the FDJ not exploiting the number of lottery games it will offer.
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