France to privatize state run Francaise des Jeux (FDJ) despite opposition
The French state is looking to privatize the Francaise des Jeux (FDJ).
Currently, the FDJ is Europe's second-largest lottery with the first being Italy’s Lottomatica. The FDJ is 72% owned by the state and for the third time the notion of privatizing the entity has been put forth. The previous attempts took place under the presidencies of Holland and Sarkozy. This time round it seems like it will happen as France has named a number of banks to work on the privatization although not everyone is happy as we'll see next.
Opposition opposed to privatization
Not everyone is pleased with the idea of privatizing it because of the contribution that the FDJ makes to state coffers. For every €10 wagered on the lottery, over €3 makes its way to the state treasury. These funds are used to fund projects to benefit the economy.
Proceeds of the sale will be used to fund projects to benefit the French economy.
Endgame not known
For operators of gambling and casinos, it is the unknown intentions of the FDJ that has caused concern. At present, the FDJ is only offering lottery games and scratch cards but privatization could mean an expansion of their product offering which could mean competition. Of course, the privatization has also created concern that controls might be relaxed which could lead to an increase in the number of gambling addicts.
Opponents argue over the loss of a revenue stream and social impact, while casinos and gambling operators question the impact on the industry.
Government defends sale
The French government has argued that by selling at least 50% of their stake, they could bring in between €1 billion and €1.5 billion which would then be used to finance a €10 billion innovation fund. The government insists that there will be no social impact as the controls it has put in place will remain.
Only time will tell what the outcome of the intended sale will be, but we expect there will be many stakeholders watching carefully.