FDJ United is currently reassessing its online betting and gaming operations as well as its non-essential assets, following a decline in its first-half earnings attributed to increased gambling taxes across Europe.
The company aims to stabilize its gross gaming revenue (GGR), optimize resource distribution, and lessen the effects of tax hikes in various regions. It is contemplating potential exits from certain segments of its online betting and gaming business, along with possible sales of non-core assets.
According to President and CEO Stéphane Pallez, the group's performance in the first half has been significantly affected by the rise in taxes.
Group GGR saw a year-on-year decrease of 1.3%, while net revenue dropped by 4.5% due to the burden of higher tax rates. EBITDA fell to €404 million (approximately US$465.77 million), down from €441 million the previous year, and adjusted net profit decreased by 19% to €180 million.
Pallez also pointed to exceptional heatwaves in France, which negatively impacted customer footfall at retail locations.
The strategic review encompasses FDJ United's online betting and gaming operations, including those acquired from Kindred Group in a €2.45 billion (US$2.82 billion) deal completed in October 2024. This business includes markets in the UK, the Netherlands, Scandinavia, Italy, and other regions where Kindred holds licenses, such as Australia and Ontario through the Unibet brand.
Tax increases have had the most significant effect on the online betting and gaming sector. Excluding the UK and the Netherlands, GGR for this segment increased by 6.6%, while net revenue grew by 0.6%.
However, tax hikes in France, the UK, the Netherlands, and Romania led to a revenue decline of nearly €24 million (around US$27.67 million), contributing to a 7.4% drop in net revenue to €431 million.
The company acknowledged ongoing difficulties in both the UK and the Netherlands but indicated that recovery efforts are in progress, rather than suggesting immediate exits from these markets.
In the Netherlands, the year-on-year GGR decline improved from 15% in the first quarter to 4.1% in the second quarter. In the UK, FDJ anticipates that an ongoing turnaround strategy will yield results by the end of 2026, despite the increasing remote gaming taxes.
FDJ provided limited information regarding its UK operations amidst rising tax pressures. The remote gaming duty in the UK rose from 21% to 40% in April 2026, while the remote betting tax is expected to increase from 15% to 25% in 2027.
The group also mentioned that its new online betting and gaming management team is dedicated to enhancing performance in the UK and the Netherlands through targeted marketing investments and improvements to the player experience.
Additionally, the company is exploring potential divestments of non-core assets within its payments and services division, although specific assets have not been disclosed. This division includes Aleda, Bimedia, and L’Addition, which were acquired prior to FDJ's acquisition of Kindred.
In the first half of the year, the payments and services division generated €30 million (around US$34.59 million) in revenue and recorded an EBITDA loss of €3 million (approximately US$3.46 million). In contrast, the online betting and gaming division produced €702 million (about US$809.33 million) in GGR, while the lottery and retail sports betting segments remained FDJ's largest revenue sources, generating €3.43 billion (approximately US$3.95 billion) and €1.24 billion (around US$1.43 billion), respectively.