France’s FDJ United Q1 results impacted by Dutch regulation

FDJ United Experiences Revenue Decline Amidst Regulatory Pressures in the UK and the Netherlands

In its Q1 financial results released on April 15, FDJ United reported a total gross gaming revenue (GGR) of €925 million ($1 billion/£791,934), reflecting a robust year-on-year growth of 30%. This positive overall performance, however, was tempered by challenges in the online betting sector.

The company’s online betting segment, particularly through its Kindred operation, witnessed a significant decline, with revenues decreasing by 10% to €231 million in the first quarter despite a 10% increase in active players. This dissonance highlights the complexities facing the online gambling market in these turbulent regulatory environments.

FDJ United attributed the downturn in online betting revenues primarily to heightened taxation in the Netherlands and increasingly stringent regulations in the UK. Significantly, when isolating revenue figures, online betting and gaming outside the Netherlands and UK rose by almost 8% compared to the previous year, highlighting regional performance disparities.

In the Netherlands, GGR plummeted by 41% in Q1, a direct consequence of an augmented tax burden—rising nearly 4% to 34.2% of GGR—and the implementation of mandatory deposit limits. CFO Pascal Chaffard pointed out that these fiscal pressures and the introduction of new regulations were detrimental to earnings. Specifically, the largest impact stemmed from a newly enforced monthly net deposit limitation.

FDJ Implements Strategies to Counteract Revenue Losses

In response to these new regulations, enacted by the Dutch Gambling Authority (KSA) last October, which cap players’ monthly net deposits at €700 (£583/$777) and further reduce it to €300 for the 18-25 age demographic, FDJ United is actively seeking ways to improve its service offerings. These constraints have led to a notable erosion in the channelisation rate, as the market share of unlicensed operators has surged, now surpassing 50% in the Netherlands.

CFO Chaffard noted, “While these measures substantially decreased licensed operators’ revenues, they also incited a sharp drop in channelisation rates.” According to a recent spring market report from the Dutch gambling regulator, this trend is alarming and underscored by the continuing shift towards unregulated betting platforms.

Nevertheless, FDJ United is optimistic about its growth trajectory, as it achieved a 15% increase in active players during the first quarter. The firm is currently refining its processes to better engage with Dutch customers regarding deposit limit increases. Players seeking to have their monthly deposit limits adjusted must submit documentation evidencing their financial capabilities. FDJ plans to streamline this process to enhance user experience and anticipates improved financial metrics in subsequent quarters.

Moreover, the total number of principal operators in the Dutch market has dropped from 27 to 25, a trend that Chaffard believes will persist. “As the market leader, we are confident that we will harness these changes to our advantage,” he stated, expressing optimism about continuing to attract new customers and expanding the active user base.

FDJ Sees Revenue Growth in Lottery and Sports Betting

Despite the challenges in online betting, FDJ United reported a 3.6% growth in lottery and retail sports betting revenues, reaching €640 million in the first quarter. In France, where FDJ holds a lottery monopoly, online lottery revenues surged by 14% to €79 million, driven by an expanding player base. Total lottery revenue in the French market also rose by 5% to €528 million.

Retail sports betting benefitted from France’s sporting successes; however, unfavorable outcomes in key football matches led to a 1% revenue decline to €112 million compared to the prior year. Encouragingly, betting stakes were up by 5%, indicating continued participant engagement.

FDJ United Prepares for Finnish Market Liberalisation

Looking ahead, FDJ United is strategically positioning itself for the impending liberalisation of the Finnish online gambling market, anticipated to commence in 2027. Chaffard highlighted, “Finland represents a significant opportunity for us as we currently operate in that market and are closely monitoring regulatory developments.”

Recent progress suggests that the legislative bill to support this market reform passed through Parliament last month and is expected to secure approval by summer, paving the way for private operator participation starting January 2027.

Conversely, FDJ United has definitively ruled out re-entering the United States market after its exit last year, with Chaffard affirming, “We recognize that profitability in this jurisdiction is unattainable.”