French competition watchdog approves FDJ acquisition of ZEturf
FDJ has agreed to “clearly separate” its monopoly gaming activities.
France.- The French Competition Authority has approved the national lottery operator FDJ’s acquisition of ZEturf. Under a deal announced last November, FDJ agreed to pay €175m for the sports betting operator, with the possibility of an additional consideration depending on performance in 2023.
At the time, FDJ said the deal would help it expand its presence in the online gambling market. ZEturf, which was established in 2001, holds around 20 per cent of the market share in France in online horse racing betting. It is also present in the Netherlands, Belgium and Spain.
However, the deal was notified to the French competition watchdog for evaluation of the two operators’ combined market share. The authority has now concluded that “in view of the low combined market shares of the parties” there is no “risk of harm to competition through horizontal effects”.
However, it identified “competitive problems resulting from the concentration within the same entity of FDJ’s monopoly activities linked to the distribution of games and betting and ZEturf’s activities on the online horse racing and sports betting markets”.
Separation of monopoly and competitive gaming operations
FDJ says it will resolve this by ensuring that it “clearly separates the exercise of its monopoly gaming activities” (lottery, scratch games, etc). Player accounts will be specific to each activity without the possibility of a gateway and the FDJ must not create a database of customers intended for the promotion of its competitive gaming activities which would reveal data relating to monopoly gaming players.
The FDJ will not be able to promote its online betting at points of sale in its network or to online lottery players, and will have to operate separate social network accounts for the different activities. The FDJ has also committed to organising its competitive gaming activities within one or more dedicated subsidiaries.
ZEturf is the second biggest operator in the French online horse racing betting market behind PMU, which retains the monopoly on betting at physical points of sale. It also operates the ZEbet brand, dedicated to online sports betting. With around 100 employees, it processed close to €800m in wagers and over €100m in pool bets in 2021, with half of bets coming from online horse racing betting. Revenue reached €50m.
