French Regulator Approves FDJ’s Acquisition of Kindred Group with Conditions
France’s competition authority, l’Autorité de la Concurrence, has approved Française des Jeux’s (FDJ) acquisition of online gaming operator Kindred Group. However, the approval comes with strict conditions to prevent FDJ from using its lottery monopoly to promote Kindred’s products.
Regulatory Concerns and Risks
The competition authority raised concerns about FDJ leveraging its monopoly customer base to cross-sell Kindred’s online betting and gaming products, including sports betting and online poker through brands like Unibet.
The watchdog cautioned that this could elevate player risks, noting that the new entity might be tempted to blur the lines between FDJ’s monopoly lottery services and Kindred’s commercial offerings.
“The new entity could be tempted to create links between the monopoly games offered by FDJ and the games offered by the target by promoting online sports and horse race betting and online poker to monopoly game players,” the authority stated.
FDJ’s Commitments to Brand Separation
To address these concerns, FDJ has made several commitments, including maintaining distinct brands and websites for FDJ and Kindred.
Players will be required to create separate accounts for each brand, and FDJ has pledged not to use its branding or logos on Kindred’s products.
These measures aim to ensure clear separation between FDJ’s monopoly services and Kindred’s competitive offerings.
FDJ has faced similar scrutiny in the past, particularly following its acquisition of ZEturf’s French operations.
The competition authority has emphasized the need for strict adherence to these commitments to maintain market fairness.
Strategic Expansion into Online Gambling
The €2.45 billion acquisition of Kindred Group is a critical part of FDJ’s broader strategy to expand into the commercial online gambling market.
Stéphane Pallez, FDJ’s managing director, described the acquisition as a significant step towards becoming a “European gaming champion.”
This follows FDJ’s earlier acquisitions of ZEturf and Premier Lotteries Ireland, reflecting its ambitions to grow within the European gambling sector.
Ongoing Scrutiny and Regulatory Oversight
FDJ has a history of regulatory challenges, particularly regarding the separation of its monopoly and competitive operations.
Both FDJ and Pari-Mutuel Urbain (PMU) have faced accusations of using their monopoly positions to gain an unfair advantage over private competitors.
Additionally, FDJ is currently under investigation by the European Commission over a €380 million payment for its 25-year monopoly rights, a case that remains unresolved.
In response to these concerns, FDJ has agreed to several behavioral remedies aimed at preventing anti-competitive practices, continuing its commitments from previous acquisitions.
The Autorité de la Concurrence cleared the transaction following a phase one examination, acknowledging the steps taken by FDJ to address competition risks.
