Privatized Monopoly? France's Government Retains Significant Controls in New Market


Lee R. - October 19, 2019

Most private parties in France's emerging market remain vulnerable to arbitrary discretion.

With privatisation of state-owned regulatory authority FDJ set for next month, the French government has adapted what might be considered heavy-handed regulations.

The New Authority

The new regulations give state lottery monopoly La Française des Jeux (FDJ) the exclusive rights to operate land-based and online lottery games, and retail sports betting; and further offer controversial random number generator (RNG) games, a move land-based casino and gaming industry operators have long resisted.

A new governing body L’autorité nationale des jeux (ANJ) replaces current regulator l’autorité nationale de régulation des jeux en ligne (ARJEL).

Centralising the Regime

Under ANJ, all wagering in France will be aggregated under one authority for the first time, broadening the powers of the French licensing body to do things such as withdraw any commercial communication encouraging “excessive play.”

Private not Liberalised

While France is further privatizing the state-operated lottery monopoly La Française des Jeux (FDJ), the privatization is upon further examination taking place in a limited form that only a government could ever be capable of installing:

Public Sale

Yes, the French government will be making shares of its regulatory organization available to the public for the first time, with the initial public offering of FDJ shares to institutional and private investors taking place later this year.

Maintaining Control

However, the government will retain power over the publicly traded organization through a government commissioner with the power to “problematic decisions of the company.”

The Governor on Board

Sitting on the board of Directors, a state-appointed governor will be tasked with providing notices of State approval to leaders of the company on an ongoing basis, notices which may be at any moment. As a representative of the state, the governor will retain the power to block any capital increase of more than 10% of shares as well in accordance with state policy.
Land-based Casino Concerns

Private land-based casinos are of course further concerned about the market that would emerge with the new presence of the privatized FDJ organisation. To protect their interests, a group of three land-based casinos in France has called upon the government to limit FDJ from offering casino games in the new market.

Requesting Clarity

In a joint open letter, Casinos de France; Syndicat des Casinos Modernes de France; and the Association des Casinos Indépendants Français (ACIF) called for clarification on the types of gambling offerings which the FDJ would be allowed to make post-privatization.

Outlook

Types of gambling are not the only clarifications that the French government needs to define. Some general guidelines for disapproval of FDJ, as well as what constitutes a problematic decision; as well as some sort of code of ethics for procedures for approving and/or withdrawing support for FDJ should be offered publicly in order to establish the modicum of transparency that truly liberalizes any regulation model today.


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