The European Commission has decided to open an investigation into the granting of exclusive rights to French lottery operator Française des Jeux (FDJ) to run lotteries and sports betting for a period of 25 years.
The investigation comes as a result of a €380M payment made by FDJ to the French state in 2019 following the part privatization of the gambling operator in the same year. The payment was labeled as ‘remuneration for exclusive rights granted’ and could constitute a breach of EU regulations.
According to a statement released by FDJ, the payment was above board and within the terms of the privatization agreement.
“FDJ reiterates that as part of its privatization and under the French Pacte Law, the French State secured, for a period of 25 years, the exclusive rights that the Group had previously held for an unlimited period.
In exchange for securing these rights, FDJ paid the French State €380m, following compliance approval by the French Holdings and Transfers Commission.”
The statement goes on to add:
“FDJ is available, along with the French State, to answer any questions from the European and French authorities over the course of these proceedings to provide any information necessary to demonstrate the compliance of this legal framework with French and European law.”
In a statement released on Monday, the European Commission revealed that the investigation was opened following two complaints that the French state gave preferential treatment to FDJ. The statement also reveals that the payment and 25-year exclusivity deal could contravene EU rules on state market aid.
“The Commission will verify the conformity of the remuneration with market conditions and does not exclude at this stage that the measure may provide an undue economic advantage to Française des Jeux,”
However, a commission executive added:
“The opening of an in-depth investigation gives France and all interested parties the opportunity to comment on the measure in question. It does not in any way prejudge the outcome of the investigation ”
It’s not yet clear what form of punishment FDJ might face should the operator be found guilty of breaching EU rules.