However, FDJ will have to change several aspects of its operations to address the regulator’s concerns about risks to competition.

In particular, FDJ has committed to separating its monopoly and competitive gaming operations. It also has said it will allow any French licensed operator to access the common pool of horse racing bets it manages.

L’Autorité outlines competition concerns

Despite both FDJ and ZeTurf offering online sports betting, their low combined market share meant this alone did not concern the regulator.

Instead, l’Autorité said problems could come from FDJ’s monopoly on lottery games and retail sports betting.

It argued that, because of its exclusive rights to offer these segments, the new combined business may have been tempted to restrict the competition for online horse racing and sports betting.

This would potentially occur by FDJ promoting online horse racing and sports betting to its monopoly customers or using a single customer account for all offered games.

Issues with horse racing betting pools

The regulator also highlighted competition issues for horse racing in particular. It pointed out the new combined entity could make it more difficult for competitors to access betting pools managed by the business and would have the option of removing competitor’s bets from these pools.

“The analysis conducted by l’Autorité demonstrated that the new entity had the ability and incentive to consider implementing such strategies and that they would have been effective to the detriment of ZeTurf’s competitors,” said the competition authority.

“L’Autorité therefore concluded that the risk of harm to competition through conglomerate effects could not be excluded.”

FDJ agrees to separate monopoly and competitive gaming activities

Due to the risks to competition highlighted by the regulator, FDJ agreed to separate its monopoly and competitive gaming operations.

As such, it has committed to setting up separate websites and applications for each business area. There will be no common gateway or homepage connecting them. It has also agreed to maintaining separate player accounts for each activity.

The lottery operator said it will also refrain from creating a customer database to promote its competitive gaming activities, which would include monopoly player data.

In addition, FDJ also said it would not promote its competitive gaming activities in any of its retail outlets or online lottery hubs. Separate social media accounts will be maintained and its sales team will receive training on how to respect these commitments.

The operator will also offer its competitive gaming through a dedicated business subsidiary to create more distance between the activities.  

FDJ to allow competitors access to common gaming pools

The business also agreed to allow any operator licensed in France to have access to the common pool of horse racing betting stakes it manages.

As such, it said it will continue to maintain current pooling agreements at the date of the acquisition. The FDJ said it would not stop pooling its online horse racing bets within the common pool that is available to third parties.

After making these commitments, l’Autorité agreed to allow FDJ’s planned acquisition to take place.

Acquisition of ZeTurf

In November 2022, FDJ announced it would be acquiring ZeTurf in a €175.0m deal. It added that an additional consideration would be paid depending on the business’ performance in 2023.

The national lottery operator had previously said the acquisition would form part of its wider plans to expand in the French online gambling market.

ZeTurf is the second largest horse racing operator in France, with a 20% market share. It employs 100 staff and reported €50.0m in revenue in 2021.