La Française des Jeux (FDJ) said on Friday (14 February) that it aims to offset the cost of France’s upcoming gambling tax hike from 2027.

In a preliminary quarterly report, The French lottery and gaming giant reported strong financial results for 2024 but warned that new French tax legislation will significantly impact its future earnings.

The company saw its revenue rise 17% to €3.1bn in full-year 2024, bolstered by its October acquisition of Kindred Group. FDJ achieved EBITDA of €792m, representing a 21% year-on-year increase and a margin of 25.8%.

Excluding the Kindred acquisition, FDJ’s organic growth remained robust at 10%, with its core French gaming activities growing by 6%.

However, the company faces headwinds from France’s 2025 social security financing law, which will introduce higher levies on gambling operations starting 1 July 2025.

FDJ estimates the tax increases will reduce its revenue and EBITDA by approximately €45m in 2025, with the full-year impact reaching €90m in subsequent years.

The new legislation particularly affects online sports betting, where the public levy rate will jump from 54.9% to 59.3% of gross profit.

Traditional lottery games will also see increases, with Loto and Euromillions taxes rising from 68% to 69% of gross gaming revenue.

Additionally, the law introduces a new 15% tax on gambling operators’ advertising and promotion expenses.

FDJ says it will offset tax hike by 2027

In response to these challenges, FDJ has announced a multi-year action plan aimed at fully offsetting the tax impact by 2027, though specific details of these measures were not disclosed in the preliminary results announcement.

The company’s pro forma calculations, assuming the Kindred acquisition had been effective from 1 January 2024, suggest the enlarged group would have generated nearly €3.8bn in revenue with an EBITDA margin of approximately 25.5%.

FDJ’s gaming activities in France generated more than €2.6bn in revenue during 2024, after contributing over €4.4bn in public levies to the French state.

The company noted that for lottery games, each percentage point increase in taxation typically results in a 2% reduction in revenue.

The gaming operator is scheduled to present its complete 2024 results and future outlook on 6 March.

The financial figures released in the preliminary announcement are still subject to audit.

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