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France’s FDJ Beats Allwyn to Irish Premier Lotteries Buyout
By Jeff Osienya Jul 27, 2023 IndustryFollowing spirited bidding, renowned French lottery operator La Française des Jeux (FDJ) has won the opportunity to purchase Premier Lotteries Ireland. As a result, FDJ has also nabbed the license to operate the Irish National lottery for the next decade.The race for acquisition of Premier Lotteries Ireland (PLI) finally came to a close on 27 July after French lottery operator La Française des Jeux (FDJ) won the competitive bidding process, beating formidable contenders including Allwyn. Thus, France’s FDJ has signed a deal to purchase Irish PLI’s entire capital share, valued at €350 million (US$384.26 million). This agreement, therefore, grants the operator exclusive rights to run the Irish National Lottery until 2034.
Akin to its France-based counterpart, PLI’s products comprise scratch-offs and draw games, where 85% of sales are made at points of sale, whereas digital transactions make up the remaining 15%. As FDJ expands its reach on the global lottery scene, this acquisition will propel the operator to the frontlines, especially if it effectively manages the Irish National Lottery over the coming decade.
PLI previously operated as a holding under the Ontario Teachers’ Pension Plan (OTTP), which has been slowly downsizing its lottery subsidiaries. An Post (The Irish Post) will keep 20% of the shares, while 80% will now belong to the majority shareholder FDJ.
Surprising Win Despite Tough Competition
FDJ’s takeover bid is one that was somehow unexpected as, according to several analysts, the odds appeared in favor of Allwyn, the largest operator of lotteries (including the UK National Lottery and the French National Lottery). So, after OTTP announced its intention to close PLI, the operator immediately sprung at the opportunity to run yet another prominent National Lottery.
Allwyn also has a presence in other European countries and has established itself as a major lotteries’ stakeholder in Austria, Italy, the Czech Republic, Greece, and Cyprus. As such, the company was seen by observers in the industry as the most likely winner in the takeover bid. With that in mind, FDJ’s resounding success against Allwyn will definitely bolster its position in the global gaming landscape. Other contenders that joined in on the bid are USA’s International Game Technology, and Australia-based Lottery Corporation, among others.
Ireland’s Lottery has been around for just over 35 years, and it is no wonder that several bidders rose to the occasion as soon as PLI was put on the market. The Lottery is well-known in the European region for funding charitable causes by effectively allocating its proceeds. Since securing the 20-year license to run the Irish Lottery, PLI has significantly changed its operations, even moving some of its aspects onto more modern technological platforms to keep up with current trends.
This has created employment opportunities for over 200 individuals in over 5,300 retail premises. And after winning the highly competitive bid for ownership of PLI, FDJ has vowed to continue embracing innovation when implementing any future gaming solutions within the company. Regarding the handover, PLI Chair Vivienne Jupp said,
Quote“PLI has moved from strength to strength since winning the license for the Irish National Lottery.”
Jupp went on to thank the two shareholders in PLI, Ontario Teachers’ and An Post, commending them for supporting and building PLI into a leading European operator. He added:
Quote“During that time, the team at PLI has delivered for Good Causes and the community and looks forward to the next chapter of growth, where we will be able to share best practices with FDJ and continue to operate a responsible world-class lottery for the people of Ireland.”
Expansion Strategy a Significant Boost for FDJ Revenue
The announcement regarding the PLI acquisition came alongside the H1 financial report. FDJ has reported a year-over-year increase in revenue of 6% and an EBITDA of €300m. Although it is reportedly lower than the €308m in H1 2022, the numbers point to an overall margin of 23.3%.
FDJ also reported a 10% revenue rise in sports betting and online gaming to €257m and a 1% increase in Lottery revenue to €958m. The slight rise in lottery revenues was attributed to fewer Loto and Euromillions jackpots in H1, which, in FDJ’s view, slowed down ‘momentum in digital stakes.’ Additionally, the report revealed a 13% increase in total H1 revenue from last year’s €157.5m to €181m in 2023.
The total GGR for 2022 was €399m, €260m of which was donated to over 4,000 community programs and initiatives in the country. And with the PLI buyout, the operator is optimistic that revenues will expand significantly. PLI Managing Director Andrew Algeo expressed the company’s sentiments on the acquisition, stating:
Quote“The PLI team looks forward to partnering with FDJ for an even better performing Irish National Lottery and contributing to FDJ’s international expansion in the lottery industry.”
FDJ CEO Stéphane Pallez also commented on the apparent bright future that awaits the business, admitting that the move was a part of the operator’s cross-border expansion. She remarked in part:
Quote“This acquisition is perfectly in line with our international development strategy and our core business. FDJ is thus continuing its development while remaining faithful to its recreational, responsible, and redistributive gaming model.”
Regulatory Approval of the Buyout is Still in Process
Having beat big names in the bid to acquire PLI and consequently run the Irish National Lottery, all eyes are on La Francaise Des Jeux (FDJ) on what the next 11 years will hold. From shareholders to customers to analysts in the industry, integrating the Irish Premier Lotteries with the French operator is now a subject of great interest.
A few details, such as approval by the Irish Lottery regulator, are still in process, and FDJ has revealed that this should be finalized in H2 2023. Since PLI already has a reputation for successfully running a significant pillar of Irish national heritage, there may be a couple of challenges at the beginning. Nonetheless, the operator is bound to benefit greatly from the landmark deal.
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