FDJ United, a major player in the French gambling industry, has reported a revenue of €864 million for the third quarter ending September 30, marking a 3% decrease from a restated €890 million during the same period in 2024, which included Kindred Group’s operations.
This decline comes in the wake of increased gambling taxes in France and other crucial markets. According to FDJ, the tax burden amounted to €21 million, with €18 million resulting from changes in France where gambling tax rates were raised on July 1 for all sectors. The online betting tax rate increased from 54.9% to 59.3% of gross gaming revenue. FDJ had previously forecasted that this change would impact its full-year EBITDA by €45 million.
Chairwoman and CEO Stéphane Pallez remarked in the results report that the revenue change reflects ongoing challenges in the online betting and gaming sectors in various markets and the heightened taxation impact, particularly in France since July 1. The company, however, noted some growth in specific areas. Revenue from French lottery and sports betting rose by 2.1% to €595 million. Without the €14 million tax impact on the lottery segment, a 4.5% year-on-year increase could have been realized. Lottery revenue alone increased by 2.5% to €508 million, driven by draw and instant games, while sports betting remained steady at €87 million even without a major event like Euro 2024 the previous year.
Conversely, online betting and gaming revenue fell sharply by 15.6% to €209 million, attributed to a €7 million tax hit, mainly in France, Romania, and the Netherlands, along with stricter regulatory conditions in the UK and Netherlands. International lottery revenue saw a slight increase of 0.3% to €44 million, whereas revenue from FDJ’s payments and services business declined by 1.8% to €16 million.
For the nine months leading to September, FDJ’s revenue reached €2.73 billion, 2.1% lower than a restated €2.79 billion from the previous year. The French lottery and retail sports betting segment grew by 3.1% to €1.89 billion, with lottery up by 4.8% and sports betting down by an equal margin. Online betting and gaming revenue dropped by 12.9% to €675 million, and international lottery revenue fell by 11.5% to €124 million, partly due to the sale of Sporting Group. Payments and services revenue decreased by 1.6% to €47 million.
Looking into the future, FDJ anticipates a slight revenue decline in the fourth quarter, citing fewer exceptional draw events in the French lottery and retail sports betting. However, online betting and gaming are expected to stabilize. The group forecasts full-year revenue to exceed €3.70 billion, slightly below the restated €3.79 billion from 2024. Recurring EBITDA is projected to be around €900 million, with a margin above 24%. The company plans to continue cost-cutting measures under its Play Forward 2028 plan.
The issue of gambling taxation is not isolated to France. Across Europe, countries like The Netherlands and Sweden have also implemented significant gambling tax increases in the past year, triggering concerns about similar actions in other regions. In the UK, there is widespread speculation that a gambling tax rise will be announced in the upcoming autumn budget, while Latvia has plans to increase fees and taxes from January 2026.
Elsewhere, Poland is raising its tax on player winnings, and in Slovakia, there’s a push from the opposition to increase fees for gaming machines at land-based venues.
In the UK, the company Entain has warned of potential betting shop closures due to possible tax hikes. In a recent results call, CEO Stella David expressed that less generous bonuses and odds could also be considered as responses. Evoke has already indicated that it may close a number of William Hill betting shops, illustrating how tax changes can have significant operational impacts on gambling businesses.
These tax increases represent a significant challenge for gambling companies across Europe as they navigate the complex landscape of regulatory and fiscal changes. While some, like FDJ, are managing to maintain or even grow certain revenue streams despite these pressures, the overall outlook remains cautious. Businesses are forced to adapt strategies, from cost-cutting to reconsidering operational footprints, to maintain profitability in a shifting market environment.
David Harrison stands tall in gambling journalism, marrying his firsthand casino experiences with a deep understanding of betting psychology. His articles transform complex gambling jargon into engaging tales of strategy and chance, making the world of betting accessible and enjoyable. David’s knack for narrative extends beyond print, making him a sought-after speaker on gambling trends and future bets. In the realm of gambling, David is both a scholar and a storyteller, captivating readers and listeners alike.
