FDJ expecting €45 million additional French tax impact in 2025

State-owned Française des Jeux (FDJ) anticipates that the upcoming increase in gambling taxes in France will lead to a €45 million (£37.4 million/$47.1 million) impact on EBITDA by 2025, as the government finalizes plans for new tax and social security adjustments across various gaming sectors.

In its statement issued on February 14, FDJ indicated that by July 2026, it would be liable for an additional €90 million in taxes, aligning with the commencement of these new tax rates.

In an overview of its financial performance prior to these taxes, FDJ reported an impressive €2.6 billion in gaming revenue for 2024, following substantial tax contributions amounting to €4.4 billion.

What do the Upcoming Tax Changes in France Entail?

The new tax framework is set to take effect in July and stems from a recent finance bill introduced in France’s 2025 budget, which was presented to lawmakers last October.

French gambling taxes are predominantly determined based on Gross Gambling Revenue (GGR) and exhibit considerable variance across different verticals.

Most approved tax increases are around 1%, which extends to social security contributions calculated separately from gambling taxes. Notably, the increases for online sports betting and racing are more pronounced.

• The tax rate for lottery and Euromillions games will surge by 1% to 69% of GGR, with social security contributions (CSG) increasing to 7.2% of GGR.
• Instant draw games will face a new tax rate of 56.5% of GGR, accompanied by social security contributions also rising to 7.2%.
• Retail betting taxes will climb to 42.1% of GGR, with social security levies set at 7.6% of GGR.
• The most significant increase is for online betting, where the tax will rise from 54.9% to 59.3% of GGR, while social security contributions will see an increase from 10.6% to 15% of GGR.
• Online poker taxes will escalate from 0.2% of stakes to 10% of GGR.
• For online horse-race betting, the social security levy remains unchanged, though the levy to racecourse companies will incrementally rise from 52.3% to 52.9% of GGR.

Implications of New Advertising Tax

In addition to these changes, all gambling operators will face a 15% tax on advertising and promotional expenditures starting July, as mandated by France’s Social Security Financing Act.

FDJ commented on the anticipated consequences of these tax changes, estimating that the increased lottery levies will result in a revenue decline of approximately 2%. The organization has initiated phased measures aimed at fully mitigating the effects of these tax increases by 2027.

FDJ Reports a 17% Revenue Increase for 2024, Driven by Kindred Acquisition

On another note, FDJ is poised to unveil its comprehensive earnings for the full year 2024 on March 6. Preliminary results indicate a robust year-on-year revenue growth of 17%, totaling €3.07 billion.

This increase is primarily attributed to FDJ’s strategic integration of Kindred, following its acquisition in October, which does not encompass Kindred’s earnings prior to the merger.

FDJ reported a recurring EBITDA of €792 million for 2024, marking a 21% increase and a margin of 25.8%. Excluding Kindred, FDJ’s revenue indicated a group-wide growth of 10%, with a specific uptick of 6% in its French operations.

If incorporating Kindred’s earnings from January 2024, FDJ’s total group revenue for the year would reach €3.8 billion, maintaining a current EBITDA margin of 25.5%.