FDJ Faces €45 Million EBITDA Impact from French Gambling Tax Hike in 2025
La Française des Jeux (FDJ), France’s state-owned gambling operator, anticipates a €45 million EBITDA impact in 2025 due to forthcoming gambling tax increases. The new tax framework, part of France’s 2025 budget, will come into effect in July 2025, with the full-year impact estimated at €90 million by 2026. The company has already begun implementing a phased plan to offset these additional costs by 2027.
Details of the Tax Increases
The tax hikes, outlined in France’s latest Finance Bill, will primarily affect gross gambling revenue (GGR) and vary by gaming vertical. Key changes include:
- Lottery and Euromillions: Tax rate rising by 1% to 69% of GGR, with social security contributions increasing to 7.2%.
- Instant Draw Games: New tax rate set at 56.5% of GGR, with social security contributions also rising to 7.2%.
- Retail Betting: Tax increase to 42.1% of GGR, with a 7.6% social security levy.
- Online Betting: The largest increase, with the tax rate climbing from 54.9% to 59.3% of GGR and the social security levy rising from 10.6% to 15%.
- Online Poker: Tax will jump from 0.2% of stakes to 10% of GGR.
- Horse-Race Betting: No changes to the social security levy, but racecourse contributions will increase from 52.3% to 52.9% of GGR.
Additionally, all gambling operators will be subject to a new 15% tax on advertising and promotional expenditure starting in July 2025 as part of France’s Social Security Financing Act.
Financial Impact and FDJ’s Response
FDJ reported that these tax increases will result in a 2% reduction in lottery revenue. Despite this challenge, the company remains committed to mitigating the impact through a multi-year action plan aimed at fully offsetting the financial strain by 2027.
In 2024, FDJ generated €3.07 billion in revenue, reflecting a 17% year-on-year increase. The integration of Kindred, acquired in January 2024, played a significant role in this growth. When including Kindred’s earnings from January onward, FDJ’s total 2024 revenue reached €3.8 billion, with an EBITDA margin of 25.5%.
Upcoming Financial Reports
FDJ is set to release its full-year 2024 financial results on 6 March 2025, where it will provide further insights into its performance and outlook in light of these regulatory changes.
As the French government finalizes its tax and social security adjustments, FDJ continues to navigate the evolving landscape, ensuring compliance while strategizing for long-term growth.