FDJ United has said a 3% year-on-year fall in revenue during the third quarter of its 2025 financial year was primarily due to increased taxes in France and other core operating markets.
Revenue for the three months to 30 September amounted to €864 million ($1.01 billion), FDJ United reported. This fell short of the €890 million restated amount for the corresponding period in the previous year.
Restated revenue for Q3 2024 is based on the assumption that Kindred Group was part of the FDJ business last year. FDJ United closed its €2.45 billion acquisition of Kindred in October 2024, with its results first included in the group’s Q4 2024 numbers.
However, FDJ flagged that revenue would have been stable had it not been for various gambling tax increases across Europe, primarily France. It said the impact of the higher taxes was €21 million, with €18 million of this coming from rises in France.
Tax increases in France came into effect on 1 July and spanned both land-based and iGaming activities. The largest rise was for online betting, with the rate rising to 59.3% from 54.9% of GGR. Previously, FDJ said the changes would cut €45 million from its EBITDA total for 2025.
The market also faced increases across social welfare contributions from gambling operators as of last July.
“The change in FDJ United’s revenue at the end of September reflects the prolonged decrease in our online betting and gaming business in certain markets and the impact of higher taxation on gaming, particularly in France since 1 July,” Chairwoman and CEO Stéphane Pallez said.
Some growth despite tax impact in Q3
Detailing its performance, FDJ United revealed mixed fortunes across its four business segments. French lottery and sports betting remained the primary source of revenue at €595 million, a rise of 2.1%.
However, excluding the €14 million impact of gaming tax increase on lottery, revenue here would have been 4.5% higher year-on-year.
Lottery revenue climbed 2.5% to €508 million, driven by draw games and instant games. As for sports betting, this remained level at €87 million, despite a tough comparison period in 2024 that included the latter part of the Euro 2024 football tournament.
However, revenue from online betting and gaming fell 15.6% in Q3 to €209 million, again on a restated comparison basis.
FDJ put this down to an additional tax deficit of €7 million, mainly due to the rises in France but also in Romania. It also noted tighter regulations in both the UK and the Netherlands.
As for the other two segments, international lottery revenue edged up 0.3% to €44 million for the quarter. However, revenue from payments and services dipped 1.8% to €16 million.
Year-to-date revenue tops €2.73 billion at FDJ
As to how Q3 impacted FDJ in its year-to-date, revenue for the nine months through to the end of September hit €2.73 billion. This was 2.1% short of last year’s restated €2.79 billion total.
Declines were reported in all but one of the group’s business segments. French lottery and retail sports betting revenue was up 3.1% to €1.89 billion, with a 4.8% rise in lottery revenue to €1.57 billion offsetting a 4.8% decline in sports betting revenue.
Online betting and gaming revenue fell 12.9% to €675 million on the back of higher taxes in France and tightened regulations in other markets. International lottery revenue also dipped 11.5% to €124 million – due to the sale of Sporting Group at the end of 2024 – while payments and services revenue slipped 1.6% to €47 million.
FDJ vows to step up cost cutting
Looking ahead, FDJ said it anticipated a slight drop in revenue for the fourth quarter. This will likely be due to lower revenue from French lottery and retail sports betting, as Q4 includes several “exceptional events” in draw games. However, online betting and gaming revenue is likely to be stable.
With this, FDJ said it expects full-year revenue to reach “more than €3.70 billion”. Given that last year’s restated total was €3.79 billion, this could mean a year-on-year decline in revenue for the group. Recurring EBITDA is set to hit approximately €900 million with a recurring margin above 24%.
In addition, FDJ said it will now step up its cost reduction efforts as part of its 2025-2028 performance plans.
“The group deepens its transformation and performance plan in 2025 and pursues the operational implementation of its strategy, in line with the growth objectives of its Play Forward 2028 plan,” Pallez said.
At FDJ United, revenue was down 3% on a restated year-on-year basis to €864 million in Q3.