Good Year for Française des Jeux (FDJ) as Sports Betting and iGaming Boost Revenue

FDJ, the operator responsible for France's national lottery, has reported strong financial growth in the first three quarters of 2023. While the lottery remains a crucial source of revenue, generating €1.41 billion, it experienced a 1.2% decrease compared to the previous year. This decline is attributed to the lower number of high EuroMillions jackpot draws and the relaunch of the Amigo draw game in June, which had an adverse impact on draw stakes, down by 6.0%.

Excluding EuroMillions and Amigo, FDJ's revenue increased by 3.0%, and both draw stakes and lottery stakes saw positive growth of 1.0% and 3.0%, respectively.

In stark contrast, FDJ's sports betting and iGaming segments reported impressive revenue growth, surging by 9.3% to €360 million. This growth aligns with the increasing stakes in these two segments. An additional €103 million in revenue was derived from undisclosed activities, representing a 10.0% year-on-year increase.

Stakes in points of sales rose by 0.8% to €13.28 billion, driven by sports betting and instant games, despite the challenges posed by the Amigo relaunch. Digital stakes increased by a substantial 10.6% to €2.01 billion, reflecting a growing trend of online gambling.

The gross gaming revenue for the entire business reached €4.81 billion, with FDJ paying €3.04 billion in public levies during this period, resulting in a total revenue of €1.88 billion.

Looking ahead to the fourth quarter, FDJ anticipates revenue growth of approximately 5.0% and aims to maintain the current EBITDA margin rate at 24.0%. Despite facing challenges such as the low number of high jackpot EuroMillions draws, FDJ's CEO and chairwoman, Stéphane Pallez, remains optimistic about the company's solid growth due to robust player demand.

During the latter part of the nine-month period, FDJ finalized two significant acquisitions. They acquired the online horse racing betting site ZEturf Group and Premier Lotteries Ireland (PLI), the operator of the Irish National Lottery.

The PLI deal, announced in late July, is expected to be completed next month, while the ZEturf acquisition occurred shortly after the period's end. The PLI acquisition was valued at €350.0 million, marking FDJ's entry into the international B2C lottery market. It aims to accelerate PLI's growth and profitability.

As for ZEturf, it is the second-largest online horse betting operator in France, with a market share of around 20%. This acquisition positions FDJ as the fourth largest online gaming operator in France, offering sports betting, horse betting, and poker. In 2022, PLI reported €140.0 million in revenue, with an EBITDA margin similar to that of FDJ.

With ZEturf's revenue exceeding €50.0 million in 2022, FDJ anticipates a significant boost in its online gaming segment's revenue.

FDJ's CEO, Stéphane Pallez, stated, "The completion of the acquisitions illustrates our strategy of internationalization and diversification. We are delighted that the teams of these two operators are joining FDJ and that these operations will contribute to the group's sustainable and profitable growth."