Following the revelation that Française des Jeux (FDJ) had agreed to purchase ZeTurf Group, an online horse racing wagering site, in November last year, l'Autorité de la Concurrence (ADLC), France's national competition regulator, has now approved the said acquisition.
The regulator highlights competition concerns:
FDJ must alternate few aspects of its business to solve regulatory concerns regarding risks to competition. Specifically, the operator is devoted to splitting its competitive and monopoly gaming operations. Additionally, it said it would “allow any French licensed operator to access the common pool of horse racing bets it manages.”
Although both ZeTurf and FDJ provide online sports wagering, their low mixed market stake means that this in itself is not of concern to the regulator. Instead, the regulator said problems could arise from “FDJ's monopoly” on retail sports wagering and lottery games. It also claimed that “because of its exclusive rights to offer these segments, the new combined business may have been tempted to restrict the competition for online horse racing and sports betting.” However, this may happen if FDJ promotes sports wagering and online horse racing to its monopoly clients or implements a single user account for every game offered.
Problems with horse racing wagering pools:
Furthermore, the regulator also emphasized competition problems, especially for horse racing. It noted that the newest mixed entity could make it more hard for competitors to gain access to wagering pools operated by the company and would be offered the option of detaching competitors' wagers from these pools.
On that note, the ADLC commented: “The analysis conducted by l'Autorité demonstrated that the new entity had the ability and incentive to consider implementing such strategies and that they would have been effective to the detriment of ZeTurf's competitors. L'Autorité therefore concluded that the risk of harm to competition through conglomerate effects could not be excluded.”
FDJ accepts to split competitive and monopoly gaming activities:
Because of the risks to competition emphasized by the aforementioned regulator, FDJ accepted to split its competitive and monopoly gaming operations. As a proof of this, it promised to install applications and websites for every segment of the business. Additionally, there will be no joint passage or homepage linking them.
What's more, the lottery operator has also accepted to creates individual player accounts for every segment. Commenting on its decision to agree, FDJ said: “We will also refrain from creating a customer database to promote its competitive gaming activities, which would include monopoly player data.” It added: “We would not promote our competitive gaming activities in any of our retail outlets or online lottery hubs. Separate social media accounts will be maintained and our sales team will receive training on how to respect these commitments.”
The said operator will also supply its competitive gaming via a committed business affiliate in order to make more space between the above activities.
FDJ to permit rivals access to joint gaming pools:
The operator has decided to accept that each operator with a French license will be given access to the joint pool of horse racing wagering shares it operates. As evidence of this, it said it would “continue to maintain current pooling agreements at the date of the acquisition and that it would not stop pooling its online horse racing bets within the common pool that is available to third parties.”
And finally, following all these aforementioned promises, the aforementioned l'Autorité has accepted to permit FDJ's long-awaited purchase to happen.
Purchase of ZeTurf:
During November 2022, the takeover of ZeTurf is planned as mentioned above. When making an announcement, FDJ said that an extra fee will be paid depending on the performance of the business during this year. However, the aforementioned operator formerly said that this purchase is part of the operator's plans to extend its presence in the French online gambling market.
As for ZeTurf, it is the second biggest French horse racing operator and has a 20% market stake. It employs 100 people and revealed income of €50.0 millions for 2021.
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