FDJ United is prioritising financial discipline as weaker results in the UK and the Netherlands, alongside higher taxes, put pressure on its online betting and gaming business. The figures underline the difficulty of growing in those markets while adapting to increased tax costs.
Group CFO Dan Levy said tax rises in key markets and elsewhere in Europe added €34m to the company’s tax bill in the first nine months of the year. Online betting and gaming gross gaming revenue (GGR) was flat at €1bn, but revenue fell 8.2% year on year to €619m.
UK and Netherlands remain under pressure
UK GGR through September was almost 25% lower than in the same period last year. In the Netherlands, GGR declined 8.6% year on year.
Levy said the UK business remains profitable, although the effect of Remote Gaming Duty (RGD) rising to 40%, close to double its previous level, is becoming more apparent. He also pointed to what he described as “significant improvements” in the Netherlands.
“The UK, as you know, is a difficult situation. It’s more a question of balancing our investment to make sure that we remain profitable than anything else. We have seen some encouraging improvement in customer quality and acquisition efficiency,” Levy told investors.
The UK is a priority in the new management team’s plan for the online betting and gaming segment. FDJ United said the plan aims to support growth and lower costs by optimising marketing and customer loyalty spending.
The company also expects most of its markets to move to its proprietary sports betting platform. France has already made the switch.
“Beyond the recovery plans in the U.K. and the Netherlands, we are taking broader actions across OBG to renew with profitable growth. We are sharpening our focus on core customer lifetime value, which means basically focusing on recreational players with a more disciplined approach to marketing investments and to generosity,” Levy said.
Growth ambitions face a test
The performance highlights the challenge for a medium-sized operator seeking to move into the market’s top tier. Entain reported a 14% year-on-year rise in net gaming revenue in the third quarter, ahead of expectations, while Flutter and Super Group reported similar gains in the first half of the year.
FDJ United Chief Online Betting and Gaming Officer Pascal Chaffard previously said the company believed it could benefit from tax increases as market consolidation takes place. The latest results, however, point to a near-term focus on defending its position rather than expanding its market standing.
Across the group, GGR was reported at €6.26m and revenue at €2.57bn, down 2.8% and 5.6% year on year, respectively. FDJ United now expects GGR to decline by a low single-digit percentage and revenue by a mid-single-digit percentage for the full year.
