France’s national competition regulator, l’Autorité de la Concurrence, has granted the country’s national lottery operator Française des Jeux (FDJ) approval to acquire online horse racing betting site ZeTurf Group.

However, FDJ will need to change several aspects of its operations to address the regulator’s concerns about risks to competition.

In particular, FDJ is committed to separating its monopoly and competitive gaming operations. The company has also stated that it will allow any operator licensed in France to access the shared pool of horse racing betting that it manages.

L’Autorité raises competition concerns

Although both FDJ and ZeTurf offer online sports betting, their small combined market share meant that this was not a problem for the regulator alone.

Instead, l’Autorité said problems could arise from the FDJ’s monopoly on lottery games and retail sports betting.

It argued that the new combined company may have been tempted to limit competition for online horse racing and sports betting because of its exclusive rights to offer those segments.

This would potentially occur through FDJ promoting online horse racing and sports betting to its monopoly customers or using a single customer account for all games offered.

Problems with horse racing betting pools

The regulatory authority also pointed out competition problems in horse racing in particular. It noted that the new combined entity could make it more difficult for competitors to access the betting pools managed by the company and would have the ability to remove competitors’ bets from those pools.

“The analysis carried out by l’Autorité showed that the new entity had the ability and incentive to consider implementing such strategies and that they would have been effective to the detriment of ZeTurf’s competitors,” the competition authority said.

“L’Autorité therefore concluded that the risk of competition being impaired by conglomerate effects cannot be ruled out.”

FDJ agrees to the separation of monopoly and competitive gaming activities

Due to the risks to competition highlighted by the regulator, FDJ agreed to separate its monopoly and competitive gaming businesses.

Therefore, they have committed to setting up separate websites and applications for each business area. There will be no common gateway or homepage connecting them. It was also agreed to maintain separate player accounts for each activity.

The lottery operator said it would also refrain from establishing a customer database to promote its competitive gambling activities, which would include data from monopoly players.

Additionally, FDJ stated that it will not promote its competitive gambling activities in any of its retail stores or online lottery centers. Separate social media accounts are maintained and the sales team is trained to adhere to these commitments.

The operator will also offer its competitive gaming through its own subsidiary to create greater distance between activities.

FDJ is intended to give competitors access to shared gaming pools

The company also agreed to allow any operator licensed in France access to the shared pool of horse racing stakes it manages.

Therefore, the pooling agreements in place at the time of the takeover will continue to be maintained. The FDJ said it would not stop pooling its online horse betting into the common pool available to third parties.

After the Autorité had made these commitments, it agreed to the planned takeover by FDJ.

Acquisition of ZeTurf

In November 2022, FDJ announced the acquisition of ZeTurf for 175.0 million euros. It added that additional consideration would be paid depending on business performance in 2023.

The national lottery operator had previously said the acquisition was part of its broader plans to expand in the French online gambling market.

ZeTurf is the second largest horse racing operator in France with a market share of 20%. The company employs 100 people and achieved sales of 50.0 million euros in 2021.