La Française des Jeux (FDJ), a leading name in the European betting and gaming landscape, has reported a robust performance for the year 2024. The company’s revenue soared to €3,065 million, marking a significant 17% increase compared to the previous year. This growth includes contributions from Kindred, integrated into the company from October 11. Excluding Kindred, FDJ’s growth was 10%, with its gaming operations in France alone up by 6%.

Strong performance and strategic acquisitions mark 2024:

The group’s financial health was further highlighted by a recurring EBITDA of €792 million, up 21% from the previous year, achieving a remarkable margin of 25.8%. According to Business Wire, this includes projections on a pro forma basis which assumed Kindred’s acquisition from January 1, 2024, indicating a potential annual revenue nearing €3.8 billion and maintaining a current EBITDA margin around 25.5%.

Looking ahead, FDJ is preparing for significant challenges due to legislative changes currently being processed by the French Parliament. The 2025 Social Security Financing Act is set to increase betting and gaming levies, which FDJ estimates will reduce its revenue and recurring EBITDA by nearly €45 million in the financial year 2025, with a full-year impact anticipated to be around €90 million.

In response, FDJ has outlined a multi-year action plan aimed at fully offsetting the financial impact of these tax increases by 2027. This proactive strategy underscores FDJ’s commitment to maintaining robust performance despite regulatory hurdles.

Detailed impact of tax increases:

The impending tax changes are detailed and extensive. Increases in public levies will affect various sectors within FDJ’s operations.

Levies on Loto and Euromillions will rise from 68% to 69% of Gross Gaming Revenue (GGR), including a social security levy increase from 6.2% to 7.2%. Point-of-sale sports betting levies will go up from 41.1% to 42.1% of GGR, with the social security component rising from 6.6% to 7.6%. Online sports betting will see an increase from 54.9% to 59.3% of GGR, with the social security levy jumping significantly from 10.6% to 15%. Levies on online poker will escalate from 0.2% of stakes to 10% of GGR.

Notably, there will be no change to the social security levy on online horse-race betting. However, the levy paid to racecourse companies will see a modest increase, with the public levies rate going from 52.3% to 52.9% of GGR. Additionally, a new 15% tax on advertising and promotional expenditure by gaming operators will be introduced.

Despite the legislative headwinds, FDJ remains optimistic about its future. The planned renovations and expansions, such as increasing gaming spaces at its establishments, are expected to attract more visitors and increase revenues. The company’s board believes these enhancements will not only modernize facilities but also improve the overall quality of service, thereby attracting premium customer experiences at both the casino and hotel levels.

As FDJ prepares to present its full 2024 results and detailed outlook on March 6, 2025, the gaming giant is clearly positioning itself to not only navigate through the upcoming regulatory changes but also to leverage potential opportunities for growth and sustainability in an evolving market.