French casinos demand ban on FDJ offering casino games

12 September 2019

A trio of associations representing French land-based casino operators and their staff have called on the country’s government to confirm that La Française des Jeux (FDJ) will remain prohibited from offering casino games once privatised.

In an open letter to the government, Casinos de France, Syndicat des Casinos Modernes de France and the Association des Casinos Indépendants Français (ACIF) asked for the government to clarify exactly what forms of gambling a privatised FDJ may offer.

The trio noted that under the current wording of the Code de Sécurité Intérieure, there is no distinction made between online and land-based casino games. This, they suggested, means if FDJ was permitted to offer online slots, it could also roll out physical machines across its retail network.

With 30,460 retailers currently selling FDJ products, this would encroach on the catchment areas of the 201 casinos represented by the associations - something they believe would have “serious consequences” for the venues.

“A decline in the gross proceeds of French casinos - which amounted to €2.3bn in 2018 - caused by this potential new competition would heavily impact the local economies of tourist communities,” the letter explained.

It noted that land-based casinos create 45,000 jobs, attract 60m visitors and support 500 cultural events financially. There are 350 bars and 300 restaurants in these venues, as well as 300 theatres and reception rooms providing work for 20,000 entertainment professionals. In addition, French casinos host 50 hotels, 35 nightclubs and 34 bowling alleys or cinemas.

From these operations, the letter pointed out, French casinos make significant contributions to the budgets of local authorities and the state, with a tax averaging 54.39% of gambling gross proceeds seeing €1.3bn in taxes paid last year.

It noted that with FDJ likely to be subject to a different tax rate and regulatory obligations, this could significantly distort competition, not to mention put players at risk if it was allowed to offer slot games without significant regulatory oversight.

The three associations represent a host of independently run land-based casinos, as well as operators such as Groupe Partouche, JOA, Groupe Lucien Barrière and Groupe Tranchant.

The letter has been published as the French government via its investment arm L’Agence des Participations de l’État (APE) prepares to sell the majority of its 72% stake in FDJ. A syndicate of banking groups have been appointed to lead the privatisation, which will see shares sold to institutional and private investors in an initial public offering, expected to take place by the end of November 2019.

Following the IPO, the French state will retain a stake in the business of no more than 30%.

Many hope the stake sale will have a knock-on effect in prompting a change in the current gross profits-based tax regime, and potentially see online casino legalised. It is also expected to see current online regulator L’Autorité de régulation des jeux en ligne (ARJEL) handed a new, expanded remit to regulate more verticals and channels.