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French Competition Authority approves FDJ’s ZeTurf purchase

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The French competition regulator, l’Autorite de la Concurrence has approved the national lottery operator Francaise des Jeux’s (FDJ’s) acquisition of online horseracing betting site ZeTurf Group.

FDJ must change several aspects to its operation to satisfy the concerns of regulators about competition risks.

FDJ, in particular, has pledged to separate its monopoly gaming operation from the competitive gambling operations. The company has also said that any French-licensed operator will be able to use the pool of horse race betting it manages.

L’Autorite outlines competition concerns

FDJ, ZeTurf and other online bookmakers offer sports betting. However, the low market share of these two companies meant that this was not enough to concern regulators.

It was l’Autorite who said that the FDJ’s monopoly over lottery games and sports betting could be a problem.

The new business may have felt tempted, due to its exclusive right to provide these segments, to limit the competition in online sports betting and horse racing.

This could be achieved by FDJ promoting sports and horse betting online to their monopoly clients or using a customer account that is used for all games.

Problems with betting on horse races

It also raised competition concerns for horseracing in particular. The regulator noted that the combined business could restrict competitors’ access to betting pools and have the ability to remove bets placed by rivals.

The competition authority said that “the analysis performed by l’Autorite showed that the new entity was able and motivated to implement such strategies, and they were effective in the disadvantage of ZeTurf’s rivals.”

The risk that conglomerate effect could harm competition was not excluded by L’Autorite.

FDJ accepts to separate monopoly gaming and competitive gaming

FDJ has agreed to split its monopoly gaming operation from the competitive gaming activities due to concerns raised by regulators about the potential risks of competition.

It has therefore committed to creating separate websites and apps for each of its business areas. No common homepage or gateway will connect them. The company has agreed that each player account will be maintained separately.

Lottery operator also said that it would refrain from building a database of customers to market its gaming competitions, including monopoly players’ data.

FDJ has also stated that it will not be promoting its online or retail lottery hubs, nor its gaming competitions in its outlets. Separate social media pages will be kept and the sales team will get training to ensure that these commitments are respected.

To create a greater distance between activities, the operator will offer competitive gaming via a business subsidiary.

FDJ allows competitors to access common gaming pools

It also allowed any licensed French operator to access the pool of betting stakes on horse races that it managed.

It will therefore continue with the pooling arrangements in place at the time of acquisition. It said that it will continue to pool its horse race bets in the pool available to other parties.

After making these promises, l’Autorite allowed FDJ’s acquisition plan to proceed.

Purchase of ZeTurf

In November 2022 FDJ will announce that it has acquired ZeTurf for EUR175.0m. The company added that a further consideration will be paid based on how the business performs in 2023.

The French gambling industry has been a focus of the national lottery operator’s plans for expansion.

ZeTurf has a market share of 20% and is France’s second-largest horse race operator. The company employs 100 people and generated EUR50.0m revenue in 2021.

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