$2.7B Kindred Group Takeover by French Lottery Giant FDJ Approved — With Caveat

Posted on: September 18, 2024, 08:32h. 

Last updated on: September 18, 2024, 09:48h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

French antitrust regulators have approved the proposed $2.7 billion acquisition of Stockholm-listed online gambling giant the Kindred Group by Française des Jeux (FDJ), France’s lottery monopoly.

FDJ, Kindred, l’Autorité de la Concurrence
FDJ will likely acquire Kindred to create a “European gaming champion” but it must keep its monopoly business completely separate from the new brands. (Image: FDJ)

However, regulator l’Autorité de la Concurrence (the Competition Authority) insisted there must be a clear separation between FDJ’s commercial activities and its monopolistic business. That means FDJ, a former state-owned corporation, won’t be permitted to cross-sell Kindred’s products to its lottery and sports betting customers.

Moreover, it must not “share a common root or logo with the FDJ or Parions Sport Point de Vente brands, or any other brand under which FDJ markets its monopoly games in France,” l’Autorité de la Concurrence said. Players will have to sign up separately for accounts with FDJ and Kindred brands.

Failure to do so would give FDJ an unfair advantage over rival commercial operators, the regulator concluded.

Monopoly Money

Kindred, formerly Unibet Group, owns some of Europe’s best-known online casino and sports betting brands, including Unibet and 32Red.

FDJ, the largest gambling operator in France, was privatized in 2018 when the French government sold off 50% of its ownership. In November 2023, the company acquired Ireland’s national lottery operator, Premier Lotteries Ireland, making it the second-largest lottery operator in Europe and the fourth-largest globally.

In October last year, FDJ completed its acquisition of online horserace betting site ZEturf, the only segment of the gambling market it had not yet entered. ZEturf is also subject to separation from the company’s monopolistic brands.

ZEturf’s main competitor is, ironically, France’s retail horse race betting monopoly Pari-Mutuel Urbain (PMU). PMU was fined €900K by l’Autorité de la Concurrence in 2020 for failing to separate its land-based and online customer bases.

That followed a complaint by ZEturf that PMU’s co-mingling of the two channels helped it gain an unfair advantage over other operators offering horse racing pools.

‘Gaming Champion’

Following news of the Kindred takeover bid in January, FDJ Chair Stéphane Pallez said the deal would create a “European gaming champion.”

In a somewhat scathing note, Regulus Partners suggested Kindred’s real attraction was that “it allows excess cash flow generated from a privatized state monopoly to be pumped into a ready-made competitive platform which the sclerotic, statist FDJ failed organically to create.”