EU Investigates French Lottery Privatization

The European Union’s executive branch is examining the transfer of ownership of the French national lottery enterprise (FDJ) to private hands. They’re looking into whether this action broke EU regulations. The company was granted the sole right to run lotteries and retail gambling in France for a period of 25 years following its privatization.

FDJ had held these rights since its beginning, initially without a time limit, as it was a state-owned monopoly. However, in 2019, the company was sold to private investors through an initial public offering (IPO) for €1.89 billion.

No longer under government control, FDJ paid the French government €380 million (£325 million/$448.4 million) for the right to continue operating lotteries and retail gambling exclusively.

However, this triggered two complaints alleging that the deal violated EU state aid rules.

According to EU law, member states are forbidden from giving preferential treatment “to specific companies or industries, or to companies located in a particular area,” such as through tax rate adjustments—although exemptions can be granted on a case-by-case basis, such as for state-owned monopolies.

The European Union’s executive branch has released a statement declaring it will meticulously scrutinize whether the compensation of the French lottery enterprise (FDJ) aligns with industry benchmarks. The commission retains the option to consider if the measure could potentially grant FDJ an unjust economic edge at this juncture.

“Initiating a comprehensive inquiry presents an opportunity for France and all interested parties to convey their perspectives. This does not pre-determine the outcome of the investigation.”

FDJ adamantly asserts that it has not breached any regulations and pledges to fully collaborate with the European Commission throughout the examination.

FDJ stated in a communiqué: “FDJ, in conjunction with the French government, will furnish all essential information to European and French authorities during these proceedings to demonstrate that the legal framework conforms to French and European legislation.”

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