A Transformational Tenure
At its core La Française des Jeux (FDJ) Group operates France’s national lottery and retail sports betting monopoly. This, in theory, sets the business in a powerful position. But in many other markets, similar monopolies fail to keep up with a changing gaming industry, losing market share to digital-native competitors or struggling to replicate retail successes online.
Looking back at Stéphane Pallez’s decade-long tenure as head of FDJ, she has arguably created the blueprint for modernizing a monopoly. Since 2014, Pallez has overseen the execution of a digitization strategy to overhaul the core product proposition.
“We have worked on optimizing game experiences, strengthening customer engagement, and enriching the online offering,” she explains. “In the lottery segment, we have developed an omnichannel offer, and a significant number of players are customers both in points of sales and online.”
FDJ is reaping rewards from these efforts. Digital revenue for the nine months ended September 30 are up 25 percent, making up 15 percent of the group total. Since Pallez joined, the digital contribution has more than tripled. The business has significantly diversified, with the acquisition of ZEturf Group giving the operator a stake in the horse race betting market, and Premier Lotteries Ireland giving it an international B2C presence.
But potentially most transformational is 2024’s acquisition of Kindred Group, strengthening FDJ’s position as an international B2C business. “Thanks to this new step, our competitive online business has now grown significantly and become truly European,” Pallez says.
It forms “a European gaming champion,” she continues. “We have activities under both exclusive rights and open to competition, both online and offline, spanning the most important European online markets. Combining strengths will enable us to accelerate this momentum in online sports betting and gaming.” With this acquisition being completed, FDJ’s international presence has expanded to account for approximately 26 percent of its revenue, compared to 4 percent today.
“Adding the revenues from the online lottery in France and Ireland, both under exclusive rights, to the online sports betting and gaming open to competition, the online share of revenue is expected to rise to 34 percent for the combined group. Thanks to Kindred’s cutting-edge digital expertise and advanced technological platforms, we will enhance our technological excellence and accelerate even more our digitalization.”
Key to this rapid evolution, Pallez continues, was FDJ’s 2019 privatization and initial public offering, something she believes is “the starting point for a new ambition for our development and transformation.” That occurred alongside the business maintaining its exclusive rights and a modernization of its legal, regulatory and fiscal framework.
While other European states debate whether to privatize gaming operations, FDJ is essentially the case in favor of doing so. And with the French state still a minority shareholder, FDJ has installed itself as a responsible actor as well as a major contributor to society. It has launched specific games to raise funds for heritage and biodiversity and was a partner to the Olympic and Paralympic Games in Paris. This summer, FDJ celebrated the 25 medals won by athletes supported by its FDJ Sport Factory program.
After a decade at the helm, Pallez is looking to build on the milestones of her tenure so far, renewing her leadership for a further four years in April 2024. There’s the integration of Kindred Group to work on, to realize the operator’s international ambitions, and in its native France the market could soon face changes—not necessarily ones FDJ supports—with a government consultation exploring online casino regulation due early 2025.
“FDJ does not advocate for the opening of this market in France,” Pallez says. “We even expressed our reservations about the amendment proposed by the government, which didn’t specify the conditions under which online casinos could be opened up to the public.”
But the group’s ambitions have evolved far beyond France. Pallez sees more and more diversified global operators in gaming and is determined to position FDJ at the forefront of these businesses in Europe.
“We believe this goes along with high expectations in terms of responsibility, integrity and exemplarity, evolving in a world of strict regulations and demanding consumer expectations,” she adds. “The changes in our industry are exciting, and FDJ fully embodies them. This is what keeps me moving ahead.”
